CNOOC hopes gain US$210m placement lift

China National Offshore Oil Corp's (CNOOC) revived share sale has received a strong boost from leading investment companies including the AIG group of companies and the private equity arm of the Singapore Government.

AIG Asian Infrastructure Fund II, GIC Special Investments - controlled by the Government of Singapore Investment Corp (GIC) - and American International Assurance will buy a combined US$210 million worth of CNOOC shares.

CNOOC gave no details of the shareholding level it will represent as part of the listing.

The placement was a prelude to the relaunch of the float of the mainland's largest offshore oil producer in New York and Hong Kong, expected in a fortnight.

CNOOC aborted a US$2.5 billion flotation in October because of poor market conditions.

Company officials yesterday said the latest accord with the US$1.7 billion AIG Fund and GIC, which manages Singapore's foreign reserves, could mark the beginning of a number of similar arrangements in future.

CNOOC relaunch was made more difficult amid recent market volatility with the tech-heavy sector bearing the brunt of the sell-out. Concerns about wariness of the so-called old economy stocks and big mainland state companies also added to the uncertainty.

PetroChina, the mainland's largest oil producer, was shunned by international investors with its debut closing falling below its issue price. It languished at HK$1.21 yesterday, against its issue price of HK$1.27.

Officials from China Petrochemical Corp (which will trade as Sinopec), the No 2 mainland oil company, earlier this week said its flotation might not take place until later this year, citing PetroChina's poor reception.

CNOOC chairman and chief executive officer Wei Liucheng emphasised the significance of this investment: 'We gain access to the international financial market to fulfil our growth plans for 2,000 and beyond.

'We have set a clear goal for the company; to establish ourselves as one of the world's premier exploration and production companies.

'Offshore natural gas is an increasingly important source of clean and reliable energy for the mainland and will be a key growth area for the company.' Last year, CNOOC earned US$495 million in net income, up 15 per cent from an estimate of US$430 million made two years ago amid the volatile oil prices.

The company recorded a revenue of US$1.8 billion last year. Daily production output averages at more than 210,000 barrels of oil equivalent.

CNOOC had reserves of about 1.7 billion barrels of oil equivalent.

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