CNOOC in US$300m deal with Spanish solar firm
China National Offshore Oil Corporation, the state-owned parent of listed dominant offshore oil and gas producer CNOOC Limited, has agreed to pour US$300 million toward a Tianjin-based joint venture with Spanish solar-panel maker Isofoton.
The venture will see CNOOC gain a technology partner to help its expansion in the renewable energy sector, while allowing Isofoton to enlarge sales in China, one of the world's fastest growing solar-energy markets, amid a slowdown in the European market due to government subsidy cuts.
Isofoton said it has technology that can convert close to 40 per cent of energy from sunlight into electricity, around double that of conventional solar panels that are in wide use around the world.
The joint venture will develop solar power plants with total generation capacity of 150 megawatts in the mainland and other markets, Isofoton said.
'Isofoton's agreement with [CNOOC] is very important in fulfilling its strategic plan, which includes China as a key market for international growth,' the Malaga-based company added.
Ma Fenglei, a Beijing-based industry analyst at Bloomberg New Energy Finance, said as solar panel prices have dropped sharply in recent years, Isofoton's expansion into more lucrative solar power stations development will offset low profits in its panel components manufacturing operation. Ma estimated global demand of 28 gigawatts lagged output capacity of 40GW this year.
China's solar power panel installation surged more than six-fold to 2.9GW last year, and became the largest market in Asia Pacific with a 48 per cent share, according to industry consultancy Solarbuzz.
Tianjin Lishen Battery, acquired by CNOOC in 2009, is one of the mainland's largest producer of lithium batteries, a competitor of Shenzhen-based BYD. Such batteries are used in mobile phones, laptop computers, digital-cameras and electric vehicles.
Tianjin Lishen has an annual output capacity of 250 million units, said CNOOC, which invested 5 billion yuan (HK$6.15 billion) in the battery producer in 2009 to fund the construction of 20 production lines. Tianjin Lishen produced 138 million units last year, earning a profit of close to 50 million yuan on revenue of 1.7 billion yuan.
CNOOC set up its renewable energy investment unit in 2007. It has wind power projects in Inner Mongolia, Hainan and Gansu, as well as biodiesel projects in Hainan and Jiangsu. It is also developing projects to extract natural gas from coal.
CNOOC also has a joint venture with communications technology firm China Putian Group, called Putian-CNOOC New Energy Power, which builds recharging stations for electric vehicles in many mainland cities.