Chinese oil giant CNOOC to raise up to US$5.1 billion in Shanghai IPO

The company will sell 2.6 billion shares at 10.8 yuan starting on Tuesday
China’s largest offshore driller was delisted from New York Stock Exchange under Trump era executive order

IPO

Iris Ouyangin Shenzhen

Published: 3:30pm, 11 Apr 2022

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CNOOC, China’s largest offshore driller, will allow investors to subscribe to its up to 32.3 billion yuan (US$5.1 billion) initial public offering (IPO) on Tuesday.

The company will sell 2.6 billion shares representing 5.5 per cent of its total share capital at 10.8 yuan and hopes to raise between 28.1 billion yuan and 32.3 billion, it said in a filing to the Shanghai Stock Exchange on Monday. Its stock will trade under the code 600938.

CNOOC is among Chinese companies whose American depository receipts were delisted from exchanges in the United States for alleged links with the Chinese military following an executive order by former US President Donald Trump. It was delisted from the New York Stock Exchange in November last year.

It joins the ranks of China Mobile, which debuted in Shanghai on January 5 this year after raising US$8.8 billion in China’s biggest IPO in a decade and the world’s second largest IPO in 2021. China Mobile competitor China Telecom also raised US$7.3 billion in its listing in China’s financial capital in August last year.

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Both telecoms firms were added to a list of 31 Chinese companies that US regulators accused of being affiliated with China’s military, and barred US investment in them in November 2020. CNOOC was added to another blacklist by Washington in January last year for allegedly intimidating neighbouring countries in the South China Sea.

CNOOC’s IPO is expected to be the largest A-share offering this year and will allow the company to widen its funding channels at home. The proceeds will be used for oilfield development projects in both China and overseas, as well as enriching its liquidity, according to its prospectus.

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The oil giant reported a record high net profit of 70.3 billion yuan for 2021 amid a surge in oil prices due to rising geopolitical tensions. Its gas sales revenue reached 222.1 billion yuan.

On Monday, its Hong Kong-traded shares fell 4.3 per cent to HK$11.16. The city’s benchmark Hang Seng Index dropped 3 per cent.

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