China oil giant targets first output cut for a decade

Chinese state energy giant CNOOC has cut its targeted output for 2016, the first such move in over a decade, as fears grow over the health of the Chinese economy and plunging oil prices.

China's economy grew 6.9 percent last year, its slowest pace in a quarter of a century, while world oil prices are at their lowest for over 12 years.

CNOOC, China's largest offshore oil and gas producer, said Tuesday it targeted production of 470 million to 485 million barrels of oil equivalent, a drop from 495 million barrels in 2015.

It would be the first decline since 1999.

"CNOOC is one of the first of the world's majors to explicitly say it will cut production," Michael Barron, director of global energy at risk consultants Eurasia Group, told Bloomberg News.

"The other big companies have all slashed spending and it's implicit that production will fall at some point in the future."

Shares in the company fell 6.13 percent in Hong Kong on Wednesday, where the benchmark Hang Seng Index also fell 3.82 percent.

The energy giant acquired Canada's Nexen energy company in 2013 for $15.1 billion. CNOOC said Nexen was the focus of its overseas development.

US crude prices extended losses Wednesday, heading towards $27 a barrel, as the International Energy Agency warned that the oil market could "drown in oversupply".

The International Monetary Fund said this week the collapse in the oil price was dragging down the global economy.

Royal Dutch Shell said Wednesday it expects a sharp decline in full-year net profit.

-- Bloomberg News contributed to this report --