CNOOC Ltd workers install cables at an ocean oil project construction site near Qingdao, Shandong province.[Provided to China Daily]

Company also expects to hit annual targets through cost controls and increased efficiency

CNOOC Ltd, China's biggest offshore oil and gas producer, said on Tuesday that it will continue to set aside around 20 percent of its spending for oil exploration for this year, despite cuts in both expenditure and output due to falling oil prices.

The oil giant will cut its total budget to less than 60 billion yuan ($9.11 billion) this year, about 11 percent year-on-year. But the percentage for exploration will remain at around 20 percent this year, the Beijing-based company said.

"Although the oil and gas industry is facing a huge challenge amid the recent plunge in crude oil prices, we will keep a certain level of spending on oil and gas exploration, which is well above the industry's average, in order to achieve our mid- and long-term development," Zhong Hua, chief financial officer of the company, said at a news conference held in Hong Kong.

He said that despite the lower capital expenditure, the company expects to achieve its whole-year targets through cost control and efficiency enhancement.

CNOOC has lowered its production target for this year to 470 to 485 million barrels from the target of 509 million set in 2015, the first time in more than a decade.

Its estimated net production for 2015 stood at 495 million barrels of oil equivalent. The net production targets set for 2017 and 2018 are around 484 and 502 million barrels of equivalent respectively, according to a news release on Tuesday.

Four new projects will come on stream for this year, with nearly 20 projects under construction, CNOOC said.

Brent crude prices have slumped more than 70 percent in the past 18 months, dipping below $28 on Monday after international sanctions on Iran were lifted, paving the way for increased oil exports. Crude oil prices have squeezed the profits of many oil majors and already fallen below the production costs of most Chinese oil companies, which are estimated at $40 per barrel, but experts said that it is necessary to maintain oil and gas exploration at a certain rate.

Lin Boqiang, director of the China Center for Energy Economics Research of Xiamen University, said that the company needs to continue its oil and gas exploration to secure energy supply because the country still relies on oil imports.