China’s overseas-focused state oil explorer and producer CNOOC gained 44 percent in its first day of trading in mainland China in the latest sign of growing investor appetite for oil and gas exposure.
CNOOC, Bloomberg recalls, was delisted from the New York Stock Exchange because of U.S. sanctions last year. The Trump administration added the Chinese state oil company to a black list of companies banned from access to U.S. technology without specific permission.
Following its New York delisting, CNOOC said it would float its shares on the Shanghai Stock Exchange, seeking to raise some $5.4 billion to use for project development. Later, the total amount of money was revised down to $4.3 billion.
“We will take this opportunity to make full use of domestic and overseas financing channels to promote the high-quality and sustainable development of the company,” CNOOC’s chairman Wang Dongjin said in a statement as quoted by Bloomberg.
Meanwhile, CNOOC is pulling out of Europe and North America for fear it may become subject to further sanction action, Reuters reported earlier this month.
Citing industry sources, the report said the Chinese oil company was preparing to exit its business in Britain, the United States, and Canada. The combined output of these assets, per Reuters calculations, stands at some 220,000 bpd.
According to one industry source who spoke to Reuters, these assets were considered “marginal and hard to manage” by the company.
In the meantime, however, CNOOC is seeking to expand in Africa and Latin America, and more specifically in Brazil, Uganda, and Guyana, the Reuters report also said.
In its report on the CNOOC listing, Bloomberg noted that the company’s focus on exploration and production offers investors more direct exposure to the oil price rally than its fellow state oil majors, which also have substantial downstream businesses.
By Irina Slav for Oilprice.com
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