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CNOOC shares fall on news of purchase

(China Daily)
Updated: 2010-02-09 10:21

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CNOOC Ltd shares fell to their lowest in almost a week in Hong Kong trading after a newspaper said China's biggest offshore oil producer may spend as much as $2.5 billion on a stake in Tullow Oil Plc's Ugandan assets.

They dropped as much as 3.3 percent to HK$11.22, the lowest since Feb 2. The benchmark Hang Seng Index declined 0.7 percent. Oil in New York was at $71.44 a barrel in electronic trading, after gaining 81 percent in the past year.

A $2.5 billion bid would be the largest by CNOOC, the listed unit of State-owned China National Offshore Oil Corporation. The company has lagged behind domestic rivals PetroChina and Sinopec in overseas acquisitions since it paid $2.7 billion for a stake in a Nigerian oilfield in 2006.

Tullow is close to selling a stake in its Ugandan assets to CNOOC, London's Sunday Times reported, without saying how it got the information. Jiang Yongzhi, CNOOC's Beijing-based spokesman, said the company didn't comment on "market rumors".

CNOOC is "chasing higher asset prices", Gordon Kwan, head of regional energy research at Mirae Asset Securities, said by telephone from Hong Kong. "They could have bought this stake when oil was between $40 and $50 (a barrel) last year."

The deal with Tullow, which needs final approval from Ugandan President Yoweri Museveni, may include France's Total SA as an equal partner in the fields in the country's Lake Albert Basin, the Sunday Times said. Tullow spokesman George Cazenove declined to comment when contacted by Bloomberg News.

The UK explorer plans to produce at least 5,000 barrels a day of oil in Uganda in 2012.

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