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CNOOC Optimistic About Future Development
The successful Hong Kong listing of Chinese offshore oil giant CNOOC demonstrates international investors' confidence in CNOOC as well as the overall economic potential of China, head of CNOOC said Wednesday.
In an exclusive interview with Xinhua, Wei Liucheng, chairman and CEO of CNOOC, highlighted modern management and low-cost, high-growth business model as key to the company's successful listing.
Despite a fall in the benchmark Hang Seng index, the CNOOC closed its Hong Kong debut trading Wednesday at 7.00 HK dollars (89 US cents), up from its issue price of 5.95 HK dollars. Its US listing also proved successful with a close of US$16.12, higher than the issue price.
Wei described investors' response to the CNOOC's share offer as "warm." The company sold some 1.6 billion shares globally for US$1.26 billion. Despite early suspicion that its IPO price may be expensive, Wei said the stocks were "oversubscribed." The international offer was about 5.3 times subscribed on average. Institutional offer was 6.5 times subscribed, and the Hong Kong retail offer, accounting for some five percent of the total, was about 3 times subscribed, according to Wei.
Comparing with the CNOOC's failed share offer in New Year two years ago, Wei attributed the successful listing this time to the company's pursuit of low-cost, high-growth model, a more down-to- the-earth view of the capital market and its modern management.
"We have a more mature view of the capital market and vice versa," Wei said, referring to the fact that the company was offering a more reasonable IPO price based on the market condition and the situation of the company.
The company has fulfilled all the commitments it made last year during its pro-listing roadshow, which also gave a boost to investors' sentiments, Wei said.
The CNOOC's output of crude oil in the first nine months last year was 20 percent higher over the corresponding period in 1999.
It also made new headway in petroleum prospecting and its cost was continuing to drop, said Wei.
Stressing the company's highly effective cost-control measures, which enabled the company to be among the most low-cost oil developers in the world, Wei said his company also attaches importance to modern management.
As the only company permitted by the Chinese government to conduct exploration and production activities with international oil and gas companies in Chinese waters, the CNOOC has a management mechanism up to advanced standard in the world, Wei said.
The CNOOC is planning to spend US$4 billion in exploring nine new oil and gas fields in the next three to five years, which will ensure the company to fulfill its goal of a 15 percent annual growth, Wei said. Another US$600 million will be spent on oil and gas prospecting.
Wei believed China's imminent entry into the WTO will open up more opportunities for the CNOOC and bring in more foreign partners and technologies.
Brushing aside concerns that the company may lose its position as the company solely permitted by the government to explore offshore oil and gas with foreign pals, Wei said the government has no intention to open up the offshore oil sector to other domestic oil companies even after the country enters WTO.
Even if the offshore sector is opened to other domestic competitors, Wei said his company has no reason to fear. "We have a long history of offshore oil and gas exploration and production, and have the most advanced technologies and management, which will take others a long period to catch up with," he said.
The CNOOC is now the second largest natural gas company and third largest petroleum company in China. The company has interest in oil and gas properties in four major producing areas in China£şBohai Bay, Western South China Sea, Eastern South China Sea and the East China Sea.
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