Chinese state-owned oil and gas company CNOOC is raising 35 billion yuan ($5.41 billion) in a new share issue on the Shanghai stock exchange to fund several key oil and gas projects including Payara, offshore Guyana, where it has a 25% stake in the Stabroek Block.
The share sale could become the mainland’s second biggest new listing this year, trailing China Telecom last month and ahead of China Three Gorges Renewables (Group) in June.
The domestic fund-raising plan came as U.S. sanctions on CNOOC has forced global investors to exit or scale back investing in the firm.
CNOOC said in a statement that its board has resolved the issue of new yuan-denominated shares to be listed on the Shanghai Stock Exchange, pending approval from its existing shareholders and regulators. The company, already listed in Hong Kong, has called a shareholder vote for October 26. It did not disclose the expected listing date.
Based on the Monday close in Hong Kong, the shares that are planned to be offered in Shanghai will be worth the equivalent of 21 billion yuan. However, the pricing mechanism in mainland China is structurally different from the rest of the world, including Hong Kong.
The Guyana Government on September 30, 2020, announced the approval of the 220,000 bpd Payara Development Project.
The $9 billion development, targeted for start-up in 2024, will focus on an estimated resource base of about 600 million oil-equivalent barrels. Ten drill centers are planned along with up to 41 wells, including 20 production and 21 injection wells.
The ExxonMobil-operated Stabroek Block is 6.6 million acres (26,800 square kilometers) with current discovered recoverable resources estimated at more than 9 billion oil-equivalent barrels.
