Core Viewpoint - The oil and gas industry has achieved significant exploration breakthroughs, with domestic oil and gas reserves expected to increase, benefiting oil service companies as the country deepens its reserve and production strategies [4]. Group 1: Exploration and Production Breakthroughs - The Ministry of Natural Resources announced major breakthroughs in energy mineral exploration, discovering 10 large oil fields and 19 large gas fields during the "14th Five-Year Plan" period [4]. - New oil and gas reserves have significantly increased, supporting stable oil production of 200 million tons and natural gas production exceeding 240 billion cubic meters [4]. - From 2019 to 2024, China's crude oil production is expected to grow at a CAGR of 2.2%, while natural gas production is projected to grow at a CAGR of 7.3% [4]. Group 2: Capital Expenditure Trends - Global upstream capital expenditure is projected to decline slightly to around $600 billion in 2025, a year-on-year decrease of 4%, with deepwater investments expected to drop by 6% [5]. - As of July 2025, the average day rate for jack-up rigs is $109,700, a 5.9% increase year-on-year, while semi-submersible rigs average $279,600, up 11.5% year-on-year, both at their highest levels since 2022 [5]. Group 3: Oil Service Companies' Performance - In the first half of 2025, major oil service companies benefited from the ongoing domestic "reserve and production increase" strategy and the gradual release of overseas business performance [6]. - CNOOC's oil service subsidiary reported a 23.3% year-on-year increase in net profit, while other companies like CNOOC Engineering and CNOOC Development saw net profit increases of 13.1% and a 27% rise in gross profit, respectively [6]. - The gross profit margins for CNOOC's oil service companies improved year-on-year, indicating a continuous enhancement in operational quality [6]. Group 4: International Competitiveness - In the first half of 2025, the gross profit margins of international oil service giants Schlumberger, Halliburton, and Baker Hughes decreased compared to their 2024 annual levels, while CNOOC's subsidiaries showed improvements [8]. - The annualized ROE for CNOOC's oil service companies remained resilient, with slight increases compared to 2024, indicating a potential enhancement in international competitiveness [8].