Large-scale takeovers of overseas firms by mainland oil companies risk sparking a political backlash abroad, CNOOC chairman Fu Chengyu warned yesterday. Mr Fu said the prolonged global economic slump meant trade and investment protectionism will persist, and that a less aggressive, co-operative approach will serve mainland companies better. CNOOC yesterday unveiled a 55 per cent year-on-year decline in first-half profit. 'The global economic crisis is not over and intentional or inadvertent protectionism will only increase,' Mr Fu said. 'Large scale outright takeovers of overseas companies are not possible ... rather, co-operation can achieve win-win deals.' He attributed his caution largely to CNOOC's failed US$18.5 billion takeover bid for United States oil firm Unocal in 2005, a deal that faced stiff political opposition in Washington. His comment came as he denied that CNOOC, the mainland's dominant offshore oil and gas producer, had joined hands with China National Petroleum Corp, parent of listed PetroChina, to acquire all of YPF, the Argentine unit of Spanish oil firm Repsol. People familiar with the situation said earlier this month that CNPC was in talks to offer up to US$14.5 billion for a 75 per cent stake in YPF, while CNOOC was interested in taking a minority stake and forming a joint venture with Repsol. When asked if CNOOC would pursue co-operation with Repsol, he said: 'It is possible for us to co-operate with any company.' A takeover of YPF would attract opposition since Argentina has indicated it wanted to see domestic investors take a majority stake in YPF as part of a 'creeping nationalisation programme'. Any YPF takeover will be subject to antitrust scrutiny by Buenos Aires. Not all mainland energy companies are taking a softly, softly approach to foreign takeovers. China Petrochemical Corp - the parent of listed Sinopec - has secured two major acquisitions following a plunge in oil prices and the onset of the global financial crisis. They include the US$7.5 billion takeover of Toronto and London-listed Addax Petroleum, which owns assets in Africa and Iraq, and the US$1.8 billion purchase of Canada-based Tanganyika Oil, with assets in Syria. A 50-50 joint venture between CNOOC and China Petrochemical recently won a bid to buy 20 per cent of an oil field in Angola being sold by US energy firm Marathon Oil. CNOOC yesterday posted a net profit of 12.4 billion yuan (HK$14.07 billion) in this year's first half, down from 27.54 billion yuan in the year-earlier period. Turnover fell 40.3 per cent to 32.52 billion yuan, as a 51.8 per cent fall in average oil selling price more than offset a 20.1 per cent rise in oil output. Natural gas output slipped 3.5 per cent because of slackened demand amid contraction of demand from chemical plants, a major buyer of its gas, although gas selling price rose 6.6 per cent. The company targets full-year output of 225 million to 231 million barrels of oil equivalent (boe). First-half output amounted to 105.8 million boe. Meanwhile, Mr Fu said CNOOC had no plan to buy its parent's liquefied natural gas import and distribution assets until completion of its Zhejiang and Shanghai projects in two to three years. Its Guangdong LNG project is already in operation and the Fujian project is close to completion.