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CNOOC to Raise Funds by Tapping the Market
China National Offshore Oil Corp (CNOOC) Limited, one of the country's three largest oil companies, is expected to go public, both at home and abroad, in February.
The announcement was made by the company's vice-president Zhou Shouwei Monday at a news conference for the Seventh China International Oil and Gas Conference Fair.
Zhou said that CNOOC Limited plans to float stocks in Hong Kong and New York.
"Listing is an important part of CNOOC Limited's future capital operation,'' Zhou said.
Capital operation is one of the company's six primary strategies for growth in the future, especially during the country's 10th Five-Year Plan (2001-05), Zhou said.
Industrial analysts say that listing is an important way for domestic oil enterprises to raise more funds for future development.
China's other two State-owned oil giants, PetroChina of China National Petroleum Corp (CNPC) and Sinopec Co Ltd under China Petrochemical (Group) Corporation (Sinopec), went public in April and October respectively.
PetroChina, listed on Hong Kong and New York stock exchanges, has picked up about US$3 billion. Sinopec Co Ltd -- the country's first State-owned conglomerate to go public in Hong Kong, New York and London simultaneously -- has raised US$3.7 billion in its initial public offering last month.
Zhou did not speculate on how much CNOOC Limited will raise after it makes its appearance on the exchanges.
He did say, however, that most of the funds raised will be used in construction of exploration projects and in the acceleration of its natural gas development projects.
The company predicts its annual oil and gas output will reach 40 million tons in 2005.
This may prove important, as insiders have said that growth in China's oil and gas production will primarily depend on that of CNOOC Limited during the 10th Five-Year Plan.
The country has been experiencing a widening gap between oil production and demand in recent years.
Zhou said CNOOC will increase its natural gas output to 10 billion cubic metres per year by 2005, significantly more than current output of 4 billion cubic metres.
The company plans to establish a integral natural gas pipeline network in China's coastal areas, including the Hong Kong and Macao special administration regions, within next 10 years, Zhou said.
CNOOC possesses total proven natural gas reserves of 4,560 billion cubic metres in Chinese offshore areas.
The central government has decided natural gas should play a bigger role in fulfilling the country's energy needs, as it pollutes less.
Natural gas's proportion in the energy consumption mix is expected to rise to around 8 per cent in the next 10 years. It currently accounts for 2.2 per cent.
Zhou said CNOOC Limited is additionally looking to expand its downstream operations in chemicals, fertilizer and liquefied natural gas.
At the end of last month, CNOOC signed with Shell Chemicals, a member of the Royal Dutch/Shell Group, to build and operate a US$4 billion petrochemical project based in Guangdong Province.
The move marks the company's official initiation of downstream businesses, Zhou said.
The oil and gas conference and fair, scheduled for November 7 to 10 in Beijing, are co-sponsored by the China Petroleum Society, the International Society of Petroleum Engineers, CNOOC, CNPC and Sinopec.
The event administrators also will organize a seminar about oil-related economics and management for Chinese and foreign oil officials and experts. (Source: chinadaily.com.cn)
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