The company remains mum about the amount of its intended offering. However, it's likely that a portion of the general corporate purposes to which it will apply the funds will include the acquisition by its Bridas joint venture of the 60% of South America's Pan American Energy that's still owned by BP
CNOOC formed the Bridas venture last year by paying $3.1 billion for half of Argentina's Bridas Corporation -- which operates in Argentina, Bolivia, and Chile -- along with 40% of Pan American. In November, the venture announced that it would pay $7.06 billion for the majority share in Pan American that it didn't already own. Also, speculation has emerged that CNOOC will apply some of the funds to a Canadian oil-sands project this year.
Trading in CNOOC's shares, which are Hong Kong-listed, was halted Thursday, once sensitive financial information in connection with the bond issue was released. The company said its income for the period encompassing January through September had jumped 90% to 38.9 billion yuan ($5.89 billion), versus 20.5 billion yuan last year. Absent the intended offering, the company would have limited its financial reporting to six-month intervals.
While there still isn't clarity about when the shares will resume trading, it appears that the road show preceding the offering began in Hong Kong on Friday, before moving to London and Boston, and wrapping up in New York later this week. Despite the lack of information on the total value of the planned issue, it clearly won't begin to approach the whopping $70 billion that Brazil's Petrobras
CNOOC is following a push by its government for the major Chinese oil companies to spread their activities to a wider range of international locations. For instance, in November, the company officially lost out on a bid it was making jointly with Ghana National Petroleum -- and in competition with ExxonMobil
Also, it was announced last week that CNOOC is currently in talks with Royal Dutch Shell
My conclusion to all this activity is straightforward: With its Chinese backing and its expanding offshore concentration, I won't take my eyes off CNOOC, even for a moment.