China National Offshore Oil Corp (CNOOC) is seeking a red-chip listing to raise up to US$1 billion in Hong Kong, merchant bankers say. They said the company, which has a monopoly of offshore oil and gas exploration and production in the mainland, was aiming at a flotation size of between $500 million and $1 billion. If successful, it will be the second mainland oil exploration and development company to be listed in Hong Kong, offering investors an alternative to CNPC (Hong Kong) as a means to invest in China's pillar industry. Salomon Smith Barney was the front runner in securing the mandate to sponsor the listing, merchant bankers said . CNOOC officials did not give further details about the flotation plan, saying the company had not yet received the necessary listing approval from the mainland securities watchdog. They have tried to maintain a low-profile approach to the issue because it has become harder for mainland companies to obtain red-chip listing status since Beijing issued more restrictive red-chip guidelines in June. The company submitted the listing application to the government last year and the original target date for the flotation was this year. A CNOOC official said: 'Our development in the mainland has been very rapid, we also have some overseas business. The listing will help us expand and improve our management in line with the state policy.' The company has a market share of about 10 per cent in the mainland with the balance held mainly by China National Petroleum Corp, which has a virtual monopoly of the country's onshore oil and gas exploration and development. With a workforce of nearly 30,000, CNOOC produced about 16.28 million tonnes of crude oil last year, up from 15 million tonnes a year earlier. The official said: 'We posted handsome profits in the past two years. Growth has been steady.' The company reported net profits of more than three billion yuan (about HK$2.79 billion) in the past two years. The growth in production volume last year was offset by the slide in oil price, he said. The company intended to produce no less than 16 million tonnes of crude oil domestically this year and aimed to produce 20 million tonnes of crude oil and 10 billion cubic metres of natural gas a year by 2005. It produces about 300,000 tonnes of oil a year from its overseas projects, which was expected to reach two million tonnes by 2000. The company has developed 19 offshore oil and gas fields with 1.46 billion tonnes of oil in place and 320 billion cubic metres of gas in place proven in China. China's demand for oil products is expected to reach a peak in the next five to 10 years. It is estimated that China would need between 205 million and 247 million tonnes of petroleum by 2000, which would exceed the country's production of about 150 million tonnes a year.