Good afternoon, ladies and gentlemen. Welcome to the analyst presentation of CNOOC Limited 2021 third quarter review. I'm pleased to present Mr. Xie Weizhi, CFO of the company. We will have two parts in today's presentation. Mr. Xie will give you update on the performance of third quarter 2021. Afterwards, we'll have a Q&A session. Now, may I pass the floor to Mr. Xie.
Thank you. Good afternoon, ladies and gentlemen. Thank you for joining CNOOC Limited 2021 third quarter review conference call. I'm Xie Weizhi, CFO of the company. Now let me introduce you the company's financial and operating highlights in the third quarter of this year. Before we start, please take a moment to read the disclaimer on slide two. Let's turn to the next slide. First of all, let's have a overview of our operating performance for the first three quarters. Total net production was BOE 422.2 million , up 8.5% year-over-year. We made 18 new discoveries and successfully appraised 27 oil and gas structures. On development and production, 10 new projects have commenced production. Turning to the financial performance.
Average realized oil and gas price was $65.09 per barrel, and $6.77 per thousand cubic feet respectively. The oil and gas sales revenue was CNY 158.65 billion, increased 55.7% year-over-year. CapEx spending was CNY 56.96 billion. Slide four shows our production breakdown. In the third quarter, the net production increased 9.9% year-over-year, and the production in China increased 13% as new projects started. Our production from China and overseas was 69% and 31%. Crude liquids and natural gas represented 79% and 21% of our total production respectively. Slide five shows the company's net production of the first three quarters.
Total net production was BOE 22.2 million in the first three quarters, up 8.5% year-over-year, representing 76%-77% of the annual target. China's production increased 11.6% year-over-year, and overseas production increased 2.2% year-over-year. Please turn to slide six. In the third quarter, our average realized oil price increased 63.6% year-over-year in line with the trend of international oil prices. The average realized gas price increased 21%. Oil and gas sales revenue increased 33.6% year-over-year, mainly due to combined efforts of the increased international oil and gas prices and the increased sales volume.
Capital expenditure increased 13.8% year-over-year, mainly due to the increase of the work scope. Page seven shows the results of our exploration activities. In the third quarter, we achieved nine new discoveries and successfully appraised 13 oil and gas structures. In offshore China, six new discoveries were made. In overseas, we made three new discoveries of Whiptail, Pinktail and Turbot-2 in Stabroek Block of Guyana. Now, we would like to share with you more details on our exploration achievements in the third quarter. In offshore China, large sized commercial discoveries were made in Kenli 10-2 with 100 million tons oil proved in place volume. Breakthrough exploration was achieved in Bozhong 28-1. We successfully appraised 21-1 structure in Qiongdongnan Basin, which indicating broad natural gas prospects in the area.
Overseas, new discoveries were achieved continuously in Stabroek Block of Guyana. Up to now, the total recoverable resources have reached over BOE 10 billion . An update of our new projects for 2021 is summarized on slide 10. 10 out of 19 new projects planned for this year have commenced production, and most of the remaining projects have entered installation and commissioning stage. The company has always upheld HSE core value of safety first, environmental paramount, people-oriented and equipment integrity and puts HSE first. At the same time, the company committed to green and low carbon development, steadily implementing emission reduction of oil and gas business, and promoting the development of new energy business actively. As announced, we have initiated the process of A-share IPO. This is an important step for the company to counter U.S. sanctions and protect shareholders' interests.
On the other side, while maintaining our international development strategies, these will broaden the company's funding raising channels. At the same time promote the brand value of the company. This concludes my presentation. Thank you. Now I'd like to open the call for questions.
Thank you, Mr. Xie. Ladies and gentlemen, we now open for questions. If you would like to ask a question, please press star one. Press star one on your telephone touchpad. Our first question comes from Mr. [Non-English content]. Please continue.
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Thank you very much. I am from [Non-English content]. I know that there was an announcement dated the 26th of September concerning the A-share IPO, and today this was already passed in the shareholders meeting. I would like you to give us more elaboration on your considerations about the A-share IPO. My second question is, this year international oil price has been rising, and right now the oil price is at the level of above $80 per barrel. Based on the Q3 operation data, what do you think is the dividend outlook for this year, next year and thereafter? Thank you.
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Let me answer your first question concerning our A-share IPO. Yesterday we issued an announcement already, and in fact this resolution was passed in the EGM with 99.9% support. As a result the resolution was passed. There are actually three considerations behind our decision to issue or to conduct IPO in A-shares. The first consideration is regarding the U.S. sanction. With the U.S. sanction, we had to make an exit in the New York Stock Exchange, so we'd like to improve our shareholder structure. As a result, we've decided to return to the A-share market. The second consideration is to widen and broaden our financing channel.
After we made an exit from New York Stock Exchange, we only have the Hong Kong stock markets where we are listed, so we definitely need to broaden our financing channel. The third consideration is as essentially operated state-owned enterprise in China, we would like to actually put and improve our relationship with mainland investors. We'd like to pay back to mainland investors and enhance our own brand value as well. These are the three main considerations behind our decision for the A-share IPO. My answer to your second question is this: at present, the international oil price is indeed at a very satisfactory level, it is at around $85 per barrel, and it is also a very good level historically speaking.
In terms of our dividend payout, all along, we pay 2x of dividend every year. Usually the dividend at the year-end is better than our interim dividend. We believe that we are going to maintain the same practice of paying two dividends, that is 2x of dividend every year, and the dividend level is going to reflect our profitability as well. We believe that our profitability and our overall results this year is going to be at a very satisfactory or outstanding level if compared to historical pattern. Thank you.
Thank you. Our next question is from Neil Beveridge, Bernstein. Please continue with your question.
Good afternoon. Thank you for the presentation. Just a couple of questions. You know, firstly, you know, production seems to be well ahead of target. Do you think it's highly likely that you will beat the production target this year? Are there any unplanned shutdowns that we should be aware of in 4Q that could cause weaker production in the final quarter? Secondly, you know, can you comment just on you know the impact of some of the inflation effects that we're seeing across metal prices, materials, and what impact that may be having on the operating costs? Are we starting to see costs rise within the business as a result of those higher prices? Thank you.
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Let me answer your first question. For your first question, in the first three quarters our production volume was up 8.5%, and China production volume was up 11.6%. This year I would say that the trend of production volume is very good. Actually in the first three quarters, I believe that the typhoon season has been over. In the fourth quarter, I don't think there would be any more influence from typhoons. This year, at the beginning of this year, we gave a guidance on production volume at 545-555, and I believe that after the completion of this year, we are going to be at the upper range of this guidance. We are going to see a historical high level in production volume.
To answer your next question concerning inflation impact, it is true that commodities price has risen, and as a result, there is cost pressure on our operations as well as our construction costs. Besides, RMB has appreciated against USD. Concerning all those cost items denominated in USD, there is indeed some pressure. However our company will adopt all necessary measures to hedge against this pressure. We would say that at the end of the day, cost is still controllable, even though there is some pressure.
Thank you, we appreciate the answer and the question. Next question comes from [Non-English content], BOCI. Please continue with your question.
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Liu Zhicheng of BOCI. I have two questions. First of all, this year, the CapEx should be at around CNY 90 billion-CNY 100 billion. In the first three quarters, the amount of CapEx already utilized was CNY 50-odd billion. This year, will it be the case that the actual CapEx would be smaller than the original estimate? My second question is in Africa, your production volume of oil has come down. What are the reasons?
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Let me now provide a translation of the answers. Well, during the interim results announcement and also during our road show, we already gave an explanation concerning our CapEx. Well, in the first half year, our utilization of CapEx was rather low, and in Q3 we still lagged behind the original CapEx estimate. Well, altogether we have 19 projects running, and in fact most of these projects started operation in the second half of the year. Usually the recognition of these projects took place to a larger extent when they are closer to the commencement, operation commencement date. For the whole year, we believe that we are going to be in the lower range of the estimate of CNY 90 billion-CNY 100 billion. In fact, in the past years, every year we saw the same pattern, so usually we are at the lower range of the CapEx guidance given.
Then to answer your second question, it is true that the production volume in Africa had come down. Our main production area in Africa is Nigeria, and usually towards the middle to the later stage or part of the contract, well, that would be a recycling of the investment or recycling of the oil investment. Every year, in terms of the production amount, well, towards the mid to later stage of the period, the recycling will gradually come to an end, and then at that point in time, there would be the start of the profit sharing or profit payback period. This year we have seen a reduction in the production volume in Nigeria, that is because towards the later stage of the contract, the government is taking a bigger share of it, and our share starts to decline. That's the reason.
Thank you. Our last question is from Alex Xu, UBS. Please continue with your question.
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I am Alex Xu of UBS. I have two questions. The first question is concerning the pressure from a cost increase. For next year and the year after next year, what will you think will be the cost per barrel? Will there be any increase? The second question is about offshore wind energy projects. Over the last weekend, the government has already announced some refined policies and targets concerning offshore wind energy. I would like to know whether you also have some new targets and guidelines concerning development of offshore wind energy as well as clean energy.
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Yes, your first question is a question that the market has been very much concerned about cost. It is all along our top priority for the management's work to maintain our cost competitiveness. However, if you can, i f you talk about absolute cost, it is really extremely difficult to make sure that absolute cost will continue to come down year after year, because there are many factors that are out of our control. For instance, the increase in commodities price and also the increase in oil price. An increase in oil price will also lead to an increase in service price. As a result, all these factors are in fact out of our control. We are not really concerned about lowering absolute cost.
What we are concerned about is to maintain a relative competitive edge. In the fourth quarter next year, as well as the year after next year, we can't really promise that we are going to achieve a decrease in cost, but then we will be trying our best to keep our cost competitiveness. That has all along been the foremost target for our management. Then you also asked a question about development of offshore wind power. Well, under the dual carbon target or goal, we are trying our best to achieve a transformation in energy mix.
This, on this side, all along, we have established a basic threshold, and our plan is that in the coming five years, every year, we would spend 5%-10% of our CapEx on offshore wind power research and development. For this, there has not been any change in this particular threshold. While we continue to explore the development of wind power and achieve technological reform, we believe that our development will be able to achieve a breakthrough in the energy and also power transformation mix. Thank you.
Thank you. Ladies and gentlemen, this concludes today's presentation, and thank you very much for your attendance. We hope to see you very soon. Goodbye.
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