China National Offshore Oil Corporation, or CNOOC Group (), is one of the largest national oil companies in China, and the third-largest national oil company in China, after CNPC (parent of PetroChina) and China Petrochemical Corporation (parent of Sinopec). The CNOOC Group focuses on the exploitation, exploration and development of crude oil and natural gas in offshore China, along with its subsidiary COOEC.
The company is owned by the government of the People's Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) assumes shareholder rights and obligations on the government's behalf. One subsidiary, CNOOC Limited, is listed on the Hong Kong exchange; the other, China Oilfield Services, is listed on the Hong Kong and New York exchanges. In the 2020 Forbes Global 2000, CNOOC was ranked as the 126th largest public company in the world.
History
When the State Council implemented the regulation of the people's petroleum resources in cooperation with foreign enterprises on January 30, 1982, CNOOC was incorporated and authorized to assume overall responsibility for the exploitation of oil and gas resources of offshore China in cooperation with foreign partners, which ensured monopoly status for CNOOC in offshore oil and natural gas. With its headquarters in Beijing, CNOOC registered with capital of RMB 94.9 billion and has more than 98,750 employees.
Unocal buyout attempt
In June 2005, a CNOOC Group company (NYSE and Hong Kong-listed public company CNOOC limited) made an $18.5 billion cash offer for American oil company Unocal Corporation, topping an earlier bid by ChevronTexaco. Unocal's oil interests in Central Asia were considered a strategic fit for the company. On July 20, 2005, Unocal announced that it had accepted an buyout offer from ChevronTexaco for $17.1 billion, which was submitted to Unocal stockholders on August 10. On August 2 CNOOC Limited announced that it had withdrawn its bid, citing political tensions in the United States.
Despite a hands-off approach from the Bush administration, a group of Democrats and Republicans in Congress organized opposition to the CNOOC Limited bid. They argued that with $13 billion of CNOOC Limited's bid for Unocal coming from the Chinese government, the offer was not a free market transaction. American corporations were prohibited from purchasing assets in China, and it was also argued that foreign, communist ownership of oil assets might be a regional and economic-security risk; Unocal had sensitive deep-sea exploration and drilling technology. The Economist and other sources tried to discredit the security threat, and CNOOC was willing to undergo a US security review. Congressional delays and calls for inquiry deterred the CNOOC Limited bid.
The company was advised by Goldman Sachs. CNOOC Limited had a reputation for acting independently of the Chinese government, and had not notified government officials before bidding for UNOCAL. The political backlash in the United States caused the Chinese government to increase its oversight of Chinese companies, to avoid future risks to Sino-American relations.
CNOOC Limited faces challenges in the domestic market. Its rivals, CNPC and Sinopec, have been permitted to conduct offshore exploration once monopolized by CNOOC Limited. In accordance with the commitment by the Chinese government to join the World Trade Organization, the oil market will be opened to non-Chinese companies (such as Exxon Mobil and BP) by the end of 2006. CNOOC Limited's smaller domestic competitors have been trying to break the monopoly of the three major NOCs in the industry.
In conjunction with 2009 failed deal between Aluminum Corporation of China Limited and mining giant Rio Tinto, CNOOC's failed UNOCAL deal was perceived in China as part of a coordinated effort in the West to stall China's rise.
Nexen acquisition
Adding 61 percent to Nexen's July 20, 2012 stock price, on July 23 CNOOC agreed to buy Nexen for $15.1 billion (China's largest foreign deal). The Canadian government's Investment Canada Act was used to determine if the sale was a "net benefit" to Canada. In addition to Canadian authorities, the acquisition had to be approved by the Committee on Foreign Investment in the United States. On 7 December the sale was approved by the Canadian government, and on February 12, 2013, it was approved by U.S. regulators.
2014 onwards
In June 2014, CNOOC agreed a deal with BP worth around $20 billion that would see the latter supplying the former with liquefied natural gas.