Jan. 30 (Bloomberg) -- China Oilfield Services Ltd. rose in Hong Kong trading after saying profit almost doubled and its biggest customer Cnooc Ltd. budgeted a 44 percent jump in spending to meet Chinese energy demand.

China Oilfield Services rose 6.3 percent to HK$13.82 as the city's benchmark Hang Seng Index slumped 2.6 percent by the 4 p.m. close. Cnooc, which aims to increase oil and gas production by as much as 18 percent this year, fell 0.7 percent to HK$10.98.

Economic expansion in China that reached 11.4 percent last year has pushed Cnooc to increase exploration and sink deeper wells to supply rising energy demand. Investment in drilling, equipment and plants may climb to $5.24 billion this year as Cnooc accelerates the pace of oil and gas output.

``With over 60 percent of its revenue derived from Cnooc, China Oilfield will certainly benefit,'' said Gordon Kwan, head of China Energy Research at CLSA Ltd.

China Oilfield, a unit of Cnooc's parent China National Offshore Oil Corp., said yesterday 2007 profit rose 95 percent. The company is benefiting from increased exploration spending after benchmark New York oil prices surged 62 percent in the past year.

Cnooc, China's largest offshore oil company, targets production of between 195 million and 199 million barrels of oil equivalent this year, compared with last year's output of between 169 million and 171 million barrels, it said yesterday.

`Promising Target'

``Cnooc's 2008 output target is quite promising and very much achievable as some new fields just came on stream late last year,'' Vivian Cheung, an oil analyst with Everbright Securities Co., said from Hong Kong today.

The offshore oil explorer outperformed its larger rivals in Hong Kong trading. PetroChina Co. fell 3.9 percent to HK$10.80 and China Petroleum & Chemical Corp. slumped 5.8 percent to HK$8.32.

``After a relatively disappointing production volume growth of only 2 percent in 2007, the 2008 volume growth has exceeded its recent historical growth rates and is the highest since 2002,'' Cheng Khoo, a Hong Kong-based analyst at Lehman Brothers Holdings Inc., said in a research note today.

Cnooc started pumping oil and gas from two offshore fields in northern China's Bohai Bay, it said Dec. 27. The JZ 21-1 field is producing 3.53 million cubic feet of natural gas a day and the BZ 34-1 field is pumping 4,800 barrels of oil daily.

``The only concern is its rising capital expanding,'' said Everbright's Cheung. ``However, we think that's still affordable, given high oil prices.''

To contact the reporter on this story: Ying Lou in Hong Kong at ylou1@bloomberg.net.

Last Updated: January 30, 2008 03:48 EST