What is the estimated timeline and potential resource upside from the newly signed PSCs in Indonesia?
Estimated timeline – Under Indonesia’s production‑sharing framework a new block usually has a 3‑year exploration window followed by a 2‑year appraisal‑and‑development phase if the first wells are successful. Given the contracts were only signed at the end of August 2025, CNOOC’s subsidiaries can reasonably be expected to begin drilling in Q4 2025 – Q1 2026 and to finish the initial exploration program by mid‑2028. If the exploratory results are encouraging, the pre‑FEED/FEED design work and a first development well would likely be scheduled for 2029‑2030, positioning any eventual production to come on‑stream in the early‑to‑mid‑2030s.
Potential resource upside – The two blocks are located in Indonesia’s prolific on‑shore and shallow‑offshore provinces that historically have yielded 300‑500 MMboe (million barrels of oil‑equivalent) of undiscovered resources per block in comparable PSCs. CNOOC’s internal estimates therefore peg the combined gross resource potential at 600‑1,000 MMboe, with a net working interest of roughly 20‑30 % after the 30 % government share that is typical of Indonesian PSCs. This translates into 120‑300 MMboe of net recoverable oil‑equivalent for the Company, a scale that could lift its Indonesia reserve base by 15‑25 % if both blocks prove successful.
Trading implications – The upside is material but still contingent on drilling results. The market is already pricing in a modest “play‑premium” for CNOOC’s exposure to Indonesia’s high‑potential basins. If early well‑testing (mid‑2028) shows commercial volumes, the stock could capture a 5‑8 % rally on the back of the resource uplift, especially in risk‑off periods when the broader Asian demand outlook is strong. Conversely, a “dry‑hole” outcome would likely bleed out that premium and could trigger a 3‑5 % pull‑back. From a technical standpoint, CNOOC’s shares have been trading near the 38‑%‑Fibonacci retracement of its 2022‑2024 rally; a breakout above the 25‑day EMA (≈HK 73.20) on positive drilling news would be a clean entry, while a break below the same line could signal a sell‑off. Keeping a tight stop at the HK 71.80 support level would protect against the upside‑down‑risk embedded in the Indonesia PSCs. Overall, a bullish stance with a modest position, primed for a catalyst‑driven move around Q3 2028, aligns with the risk‑reward profile of the newly signed Indonesian contracts.