As the dust settles on the bitter struggle between CNOOC and American oil giant Chevron for United States oil firm Unocal, speculation has turned to how the Chinese company plans to forward its long-standing aim of becoming a multinational petroleum major.
Observers believe CNOOC will now consider buying a stake in Woodside Petroleum, Australia's largest independent oil and gas firm. Woodside has large offshore gas resources in northwest Australia that would enable the Chinese company to expand its offshore gas portfolio in the region quickly.
CNOOC has reportedly expressed an interest in Royal Dutch/Shell's 34 per cent stake in Woodside.
The Australian government, however, rejected Shell's attempt to take a majority stake in Woodside in 2001 on grounds of national interest, prompting analysts to believe that any CNOOC bid could face failure after a gruelling ride through the Australian political process.
'Shell had been drilling [for] gas in Australia for 50 years. If it was stopped from taking over Woodside, it might prove be very hard for CNOOC to move in,' said Mario Traviati, oil and gas analyst at Merrill Lynch, which has provided investment banking services to CNOOC in the past year.
'My view is that it would be unlikely for CNOOC to acquire listed companies. Co-development of projects with government-owned oil and gas companies in Asia, the Middle East and the Caspian Sea region is a more likely scenario.'
Other analysts said the company may want to return to what it does best - using China's fast-growing demand for natural gas as its bargaining chip to buy minority stakes in gas assets in the region.