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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