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Cnooc Seeks to Invest in U.S. Shale Projects to Expand Reserves, Wang Says
Cnooc Ltd. (883), China’s biggest offshore energy explorer, plans to increase investments in North American shale projects to expand reserves and acquire technology to develop domestic fields.
“The U.S. has advanced shale oil and gas technology and rich resources,” Chairman Wang Yilin said in an interview in Beijing today, declining to identify potential sites and partners. “We are interested in U.S. shale projects.”
Cnooc has bid for at least $4.5 billion of overseas assets since the beginning of last year, including stakes in shale assets held by Chesapeake Energy Corp., to help increase overseas production. The Hong Kong-listed company, which relies on areas off the Chinese coast for 80 percent of its output, slashed its 2011 production target after oil leaks shut the Penglai 19-3 field in northern China.
“The company’s overall oil and gas output this year should be basically the same as in 2011,” said Wang as he arrived at the Great Hall of the People for the opening of the country’s legislature. “We are awaiting government approval to restore output at Penglai. The conditions are in place to resume production at the field.”
Cnooc said on Jan. 19 it aims to produce the equivalent of 330 million to 340 million barrels of oil in 2012, a gain of as much as 2.7 percent from last year. Overseas oil and gas production may reach as much as 13 million tons this year, Wang said. That’s equivalent to about 95 million barrels.
The shares have fallen 4.4 percent in Hong Kong trading in the past year, compared with the 8.3 percent decline in the benchmark Hang Seng Index. Cnooc dropped 0.5 percent to HK$17.36 as of 10:36 a.m. local time.
Cnooc has started exploring its first shale gas site in China, following rivals including PetroChina Co. (857) in the search for the unconventional fuel, parent China National Offshore Oil Corp. said on Jan. 11.
China, estimated to hold more gas trapped in shale than the U.S., may hold its second auction of exploration areas by the end of February or in early March, Zhang Dawei, deputy director of oil and gas research at the Ministry of Land and Resources, said on Feb. 13.
“We don’t have a plan to participate in the next domestic shale gas auction, but will look out for future opportunities,” Wang said.
--Chua Baizhen and Jing Yang. With assistance from Guo Aibing in Hong Kong. Editors: Ryan Woo, Amit Prakash.
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