Royal Dutch/Shell to Invest Up to $400m in China National Offshore Oil Corp (CNOOC)

Strategic Insights -

Royal Dutch/Shell is stepping up its commitment to China with plans to invest up to $400m in the initial public offering (IPO) of China National Offshore Oil Corp (CNOOC). This move is expected to enhance the listing prospects of CNOOC, which had a previous IPO attempt fall through last October. Shell's participation would also position the oil major for potential strategic alliances with CNOOC in downstream oil and natural gas retail businesses.

Key Takeaways:

  • Royal Dutch/Shell plans to invest up to $400m in the IPO of China National Offshore Oil Corp (CNOOC).
  • The investment is expected to enhance CNOOC's listing prospects, which were previously hindered by a failed IPO attempt last October.
  • Shell hopes to secure involvement in lucrative future projects, including participation in China's first liquefied natural gas import terminal in Guangdong province.
  • The supply contract for the LNG terminal could yield up to $10bn in imports over 20 years.
  • Shell's support for CNOOC's IPO could help the company transform from an oil exploration and production firm into an energy company.
  • The IPO offering size is uncertain, but CNOOC plans to offer a 25% stake for between $1bn and $2bn.
  • Shell is a large producer of natural gas in Asia, primarily in Brunei and off Sarawak in Malaysia.

Statistics:

  • Royal Dutch/Shell plans to invest up to $400m in CNOOC's IPO.
  • CNOOC had a previous IPO attempt that fell through last October.
  • The company secured $460m in private placements since April, but none of its investors are oil industry specialists.
  • CNOOC plans to offer a 25% stake in its IPO for between $1bn and $2bn.
  • Shell is a leading producer of natural gas in Asia, with operations in Brunei and off Sarawak in Malaysia.
  • The LNG import terminal in Guangdong province could yield up to $10bn in imports over 20 years.

Sources:

  • "Royal Dutch/Shell seeks $400m stake in China oil deal" (exact quote not provided in the source).