CNOOC
From Wikipedia, the free encyclopedia
| CNOOC | |
 |
|
| Type | State Owned |
|---|---|
| Founded | 1982 |
| Headquarters | Beijing, China |
| Key people | Fu Chengyu Chairman and CEO |
| Industry | Oil and Gas |
| Employees | 24,000 |
| Website | http://www.cnooc.com.cn |
China National Offshore Oil Corporation (CNOOC, SEHK: 0883, NYSE: CEO, Chinese: 中国海洋石油总公司) is the third-largest National Oil Company (NOC) in the People's Republic of China next to CNPC, Sinopec. It focus on the exploitation, exploration and development of crude oil and natural gas offshore of China. Its listed arm CNOOC Ltd shares are traded in Hong Kong and New York. China Oilfield Services (COSL) is a fellow subsidiary of CNOOC Limited listed in Hong Kong.
CNOOC is a state-owned oil company, 70% of whose shares are owned by the Government of the People's Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council performs the rights and obligations of shareholder on behalf of the government.
Contents |
[edit] History
When the State Council promulgated the Regulation of the People's Republic of China on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign Enterprises on January 30th 1982, CNOOC was incorporated and authorized to assume the overall responsibilities for the exploitation of oil and gas resources offshore China in cooperation with foreign partners, which in effect ensured the monopoly status of CNOOC in offshore oil and natural gas industry. Headquartered in Beijing, CNOOC registered with a capital of RMB 50 billion and now has employees more than 24,000.
[edit] Operations
CNOOC keeps on optimizing its industrial chain by taking upstream business as its core business and developing from an independent company into an integrated energy company. CNOOC has established six business sectors ranging from oil and gas exploration and development, technical services, logistic services, chemicals and fertilizer production, natural gas and power generation to financial services, insurance in more than two decades, all undergoing smooth and synergetic growth.
In 2004, CNOOC realized a sustained growth in oil and gas output. It generated sales revenue of RMB 70.92 billion and net profit of RMB 24.22 billion, and paid taxes of RMB 12.09 billion in 2004, increasing by 32%, 62% and 80% respectively as compared with the previous year. As the end of 2004, its total assets and nets assets had reached RMB 153.26 billion and 83.06 billion, a 28% and 21% increase as compared with the beginning of the year. Its gross profit and total assets rank 5th and 12th among state-owned enterprises in China. Outstanding performances of the company has been fully recognized in the capital market with Standard & Poor's and Moody's Investors Service assigning CNOOC a long term BBB+ and A2, equivalent to China' sovereign rating and the highest ratings for Chinese companies.
Oil and gas exploration and production saw a steady growth in 2004. The oil and gas output reached 36.48 million tons of oil equivalent, increasing by 3.12 million ton or 9% as compared with 2003. Its domestic production reached 24.72 million ton, increasing by 11% as compared with the previous year, higher than the average national growth rate of 3%. Annual output in Bohai Bay exceeded 10 million ton of oil equivalent for the first time, making it the second major offshore producing area with an output of over 10 million ton in China after Eastern South Sea and also making it an important energy production base in northern China.
In addition to the steady growth in upstream business, CNOOC made great achievements in mid- and downstream business. It set up CNOOC Gas& Power focusing on the downstream development of gas distribution and gas power generation. CNOOC has accumulated vast experiences in the field of Liquefied Natural Gas in the past few years. Though in an increasingly competitive domestic LNG market, CNOOC concluded all mid and downstream commercial contracts of Guangdong and Fujian LNG projects, which imported 3.5 million ton per annum(mpta) and 2.6 million mpta LNG respectively from North Western Shelf Australia(NWs) and Tangguh Indonesia, and laid a sound foundation for smooth operation. LNG projects in Zhejiang and Shanghai started execution and CNOOC also signed head of agreements (HOAs) on LNG cooperation with Liaoning, Tianjin, Hebei, Hainan and Jiangsu. So far CNOOC has completed its preliminary strategic deployment in natural gas industry in the costal areas south to the Yangtze River. In these projects, CNOOC not only is responsible for the construction of LNG receiving terminals and trunklines for gas transmission, but also for the construction of gas-fired power plants too.
In April 2004, CNOOC-SINOPEC United International Trading Co., Ltd. was granted the license to import crude oil by the Ministry of Commerce, which field used to be monopolized by CNPC, Sinopec , Sinochem and Zhuhai Zhenrong. In July, Nanhai Refinery Project with an annual capacity of 12 million ton, a joint-venture between CNOOC and Royal Dutch Shell and the largest joint venture China ever had, was approved by NDRC, indicating that CNOOC has established its integrated industrial portfolio by marching into refining business, paving the way for CNOOC’ next step into the retail and wholesale of refined oil used to monopolized by CNPC and Sinopec.
The three listed companies under CNOOC had remarkable performances in 2004.The share price of CNOOC Limited rose by 37% and its market capitalization reached RMB 181.68 billion. The share price of CNOOC Engineering Ltd. listed in Shanghai Stock Exchange rose by 66.11%. The market capitalization of China Oilfield Services Ltd. reached RMB 10.1 billion. At the end of 2004, market capitalization of the three listed companies had approached RMB 200 billion, 3.3 times as much as their net assets. The value of state-owned assets was effectively increased.
CNOOC makes continued efforts in oil and gas exploration and development, exploitation of overseas resources, development of midstream and downstream business and establishment of modern business system in 2005, to achieve the strategic objective of building an integrated energy company with international competitiveness and modern management system by 2008 with fast and quality growth and strong profitability. It aims to develop into a world-class integrated international energy company.
Under the direction of ex-CEO Wei Liucheng, who was promoted to the governor of Hainan province in October 2003 as a reward for his outstanding work, and the incumbent chairman and chief executive Fu Chengyu (傅成玉), CNOOC took aggressive measures in M&A relevant to core business in recent years, among which it acquired five blocks in Indonesia from Spanish oil company Repsol in 2002 and became the largest offshore operator; in 2003 it bought 5.3% of interests in NWS ensuring the supply of Guangdong LNG project, in the same year it exercised the preemption right to acquire 12.5% of interests in Tangguh to ensure the supply of Fujian LNG project; in October 2003 it bought 12.5% interests in Gorgon Australia which is planned to ensure the supply of Shanghai and Zhejiang LNG projects.
The most important deal was in June 2005, CNOOC made an all-cash $18.5 billion offer to buy American oil company Unocal Corporation, topping an earlier bid by ChevronTexaco. Unocal's extensive oil interests in Central Asia are considered to be an excellent strategic fit for CNOOC. On July 20, 2005 Unocal announced that it had accepted an increased buyout offer from ChevronTexaco for $17.1 billion. This decision was submitted to a vote by Unocal stockholders on August 10, 2005. Earlier, on August 2, CNOOC announced that it had withdrawn its bid for Unocal, citing political tension inside the United States.
Despite a hands-off approach from the Bush Administration, a broad group of Democrats and Republicans in Congress organized opposition to the CNOOC bid. They argued that with $13 billion of CNOOC's bid for Unocal coming from the Chinese government, the offer did not represent a free market transaction and it had questionable motives. Further, they pointed out a lack of reciprocity as American corporations were prohibited from purchasing analogous assets in Communist China. They also argued that the foreign and particularly communist ownership of oil assets could represent a regional and economic security risk. Unocal also had sensitive deep-sea exploration and drilling technology with dual-use potential [1][2]. (The Economist and other sources attempted to debunk the security threat, while CNOOC was willing to submit to a US security review.) While there was no direct legal route to block the purchase, Congressional delays and calls for extensive research into the matter created significant additional risk around the CNOOC bid.
Besides this failed bid, CNOOC also faces tough new challenges in the domestic Chinese market. Its rivals CNPC and Sinopec were recently granted approval to carry out offshore explorations once monopolized by CNOOC. Furthermore, in accordance with the commitment Chinese Government made in entering the WTO, the oil retail and wholesale market will be further opened to international oil companies in the end of 2006, meaning large foreign energy firms, such as Exxon Mobil and BP, will be freer to make inroads into the domestic Chinese market. At the same time, CNOOC's smaller domestic counterparts have been pushing to end the current monopoly of three major NOCs in the oil & gas industry, thereby introducing even greater competition. With this introduction of new foreign and domestic competition, CNOOC (as will the rest of the Chinese energy sector) is certain to face new challenges - and opportunities - in the years ahead.
[edit] LNG Terminals
CNOOC is the first company to bring LNG (Liquefied Natural Gas) to China, with the completion of its Dapeng LNG Terminal in Guangdong. The terminal received its first LNG cargo in July 2006, from the NW Shelf LNG project in Australia. The following are planned/proposed LNG terminals by CNOOC:
| Name | Location | Start-up Date | Capacity (mmtpa) | CNOOC share |
|---|---|---|---|---|
| Dapeng LNG | Guangdong | 2006 | 3.7 | 33% |
| Putian LNG | Fujian | 2007 | 2.6 | 60% |
| Yangahan LNG | Shanghai | 2008 | 3.0 | 45% |
| Ningbo LNG | Zhejiang | 2009 | 3.0 | 51% |
| Hainan LNG | Hainan | 2009 | 3.0 | 65% |
| Qinghuangdao LNG | Hebei | 2010 | 2.0 | N/A |
| Binhai LNG | Jiangsu | 2010+ | 3.0 | N/A |
| Yingkou LNG | Liaoning | 2010+ | 3.0 | N/A |
| Zhuhai LNG | Guangdong | 2010+ | N/A | N/A |
