Minority investors say latest plan would have thrown away exclusive rights
An independent shareholders' revolt at China's dominant offshore oil and gas producer CNOOC has scotched plans to allow its parent firm to invest in rival businesses and compete with other mainland offshore oil and gas companies.
In a huge setback for the board of CNOOC, 59.08 per cent of the independent shareholders voted against the proposal at an extraordinary general meeting on New Year's Eve. According to Hong Kong Exchanges and Clearing, 2.87 billion votes were against the proposal compared with 1.98 billion in favour where one share equals one vote.
The vote was hailed as a victory by minority shareholders, including shareholder rights activist David Webb, who has long campaigned against the move, saying the company was throwing away its exclusive rights.
The vote comes four months after CNOOC was forced to withdraw an US$18.5 billion bid for US oil firm Unocal Corp due to opposition from US legislators concerned that a sale to CNOOC would compromise US energy security.
CNOOC had hoped to leverage its entirely state-owned parent firm's political connections to increase its chances of success in overseas mergers and acquisitions.
To achieve that, it proposed amending the non-compete undertaking by its parent firm, China National Offshore Oil Corp, thus allowing the latter to engage in upstream oil and gas exploration and production. Currently, CNOOC has exclusive rights within the group to participate in all upstream projects to avoid intra-group competition.
