CNOOC Ltd., China’s biggest offshore oil and gas producer, Friday projected about US$1.2 billion in first-half losses as it took a charge on its Canadian oil sands assets.

    The Beijing-based company expects to report a loss of about 8 billion yuan (US$1.2 billion) for the first six months of the year, compared with profit of 14.7 billion yuan in the same period in 2015. It would be CNOOC’s first half-year loss since 2000, when it began trading.

    The firm may pay a special dividend despite a half-year loss, Morgan Stanley analysts said in a statement. CNOOC has been very aggressive in paying out dividends to keep shareholders happy. It paid 20.4 billion yuan in dividends in 2015, even though it only made 20.2 billion yuan in annual profit.

    CNOOC’s expected loss is attributable to the further decline in crude prices during the six-month period, as well as impairment and provisions on oil and gas assets, including oil sands in Canada, it said.

    “As a pure upstream player, CNOOC is too tied to oil prices and has no refining exposure to hedge against low prices,” said Tian Miao, an analyst with policy researcher North Square Blue Oak Ltd. (SD-Agencies)