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Charles Kennedy

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China’s Oil Giants Face NYSE Delisting

Chinese crude oil companies listed in New York may soon be kicked out, after the New York Stock Exchange delisted three telecoms with headquarters in China, Bloomberg reports, due to alleged ties to the Chinese military.

"More Chinese companies could get delisted in the U.S. and the oil majors could come as the next wave," an executive director of a Hong Kong-based investment bank told Bloomberg. Steven Leung, however, added that for the telecoms, at least, the impact of the delisting would not be particularly serious as they weren't traded all that actively on NYSE.

According to the report, CNOOC, the state offshore oil exploration and production company, is the one most likely to follow the three telecoms on the way out. The U.S. federal government last year added CNOOC to a blacklist of companies with ties to the Chinese military. The blacklisting effectively cuts these companies' access to funds from U.S. investors and access of investors to these companies' stocks.

CNOOC is China's biggest offshore exploration company and the only one among the state oil giants that is purely focused on exploration and production. According to a recent investment analysis published in Yahoo Finance, CNOOC is a lucrative investment opportunity because it holds a monopoly over offshore exploration through several production sharing contracts. CNOOC also boasts some of the lowest all-in costs in the world.

In response to the U.S. Department of Defense's actions, Beijing has threatened with its own blacklist of U.S. companies, although the latest statements from China are along more amenable lines. The Ministry of Commerce said it would take steps to protect its companies, following the news about the three telecoms' delisting, but added that it hoped the matter would be resolved by Washington and Beijing working together. The Foreign Ministry was less amendable, accusing Washington of "viciously slandering" its policies for integrating its military complex and business sector.

By Charles Kennedy for Oilprice.com

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Leave a comment
  • Robert Berke on January 04 2021 said:
    Name one major oil company that does not cooperate with it national military.
  • Mamdouh Salameh on January 04 2021 said:
    Outgoing President Trump is probably the worst loser in the history of US presidential elections. His behaviour since losing the presidential elections to Joe Biden could easily be depicted as lacking sanity and hell-bent on creating difficulties even possible military conflicts for President-elect Biden to clear after him.

    I wouldn’t be surprised if his odd behaviour leads him to continue deliberately to take provoking measures against China to precipitate a serious conflict with it or even egged by Israel embark on a military adventure against Iran or even make a grab for power in the United States with support from elements of the military.

    His latest plans to have Chinese oil companies delisted from the New York Stock Exchange due to alleged ties to the Chinese military fall within the above-mentioned category. He has already delisted three Chinese telecom companies under the same allegations. The blacklisting effectively cuts these companies' access to funds from U.S. investors and access of investors to these companies' stocks. Still, China is rich enough that it can do without US investments.

    The Chinese leadership is determined not to let itself be provoked by the actions of an outgoing president who will be forced out of the White House by the 20th of January. If, however, Trump’s actions precipitate a dangerous situation, China will be ready and waiting for him.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

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