CNOOC, the country's biggest offshore oil and gas producer, plans to diversify into midstream oil refining and downstream chemical production to become an integrated oil company and increase its stock market value, chairman Fu Chengyu said yesterday.
It is the first time CNOOC has spelt out its strategy to expand into downstream businesses, although Mr Fu stressed the diversification would be carried out by state-owned parent company China National Offshore Oil Corp first.
'The market always gives integrated oil companies a higher valuation than a pure exploration and production oil company,' said Mr Fu after CNOOC's annual shareholders' meeting. 'For CNOOC to achieve a higher valuation, the next step is to develop into an integrated oil company gradually.
'Downstream businesses involve huge investment. Our parent will inject these businesses into CNOOC when our shareholders think it is good for the company,' Mr Fu said, without giving a timetable.
The Beijing-based parent firm is involved in a wide range of businesses, from oil exploration, chemical production and refining, natural gas and power generation to financial and logistic services.
It has started building some liquefied natural gas import projects in coastal provinces and a big oil refining plant in Huizhou, Guangdong province.