CNOOC Ltd, China's biggest offshore oil producer, will seek investments in Africa after US lawmakers last year blocked the company's US$18.5 billion bid for Unocal Corp, Chairman Fu Chengyu said.

 

"If you can't do it somewhere, then you can always do it somewhere else," Fu said in an interview in Beijing yesterday. "We're looking at opportunities in Africa as a whole."

 

Overseas acquisitions would help Fu increase oil supplies to a Chinese economy that grew 11.3 percent in the second quarter of this year, its fastest pace in more than a decade.

 

Nigeria, where CNOOC invested US$2.7 billion in April, offers a "great deal of opportunities," he said.

 

"Fu has been humbled by the Unocal experience," said Liu Yang, who helps manage US$3 billion of Asian assets at Atlantis Investment Management Ltd, including CNOOC shares, in Hong Kong.

 

"Rather than just expanding quickly, he's now more practical in his approach to steadily grow the company."

 

Angola and other African nations that together supply 12 percent of the world's oil are expanding sales to China, the fastest-growing energy market.

 

Premier Wen Jiabao in June visited seven African nations as oil prices climbed to records.

 

CNOOC will pursue partnerships with companies including France's Total SA, operator of the Nigerian field, said Fu, 55. The company, which has its biggest reserves off the coast of China, is also exploring in Equatorial Guinea and Kenya, and studying fields off Madagascar.

 

CNOOC shares climbed 20 percent this year compared with a 33 percent advance by PetroChina Co, the publicly traded unit of China National Petroleum Corp, the country's biggest oil company. CNOOC stock gained as much as 0.8 percent yesterday to HK$6.30 (81 US cents) on the Hong Kong exchange.

 

The Nigerian field is also offshore, reducing the risk of disruptions by rebels who have attacked land-based oil facilities.

 

"There might be some risks, but we are happy," Fu said. "I believe this will become one of the long-term growth areas for our company."

 

Fu ruled out acquisitions in Russia, the world's second-biggest oil producer, where the company's two larger Chinese rivals are expanding.

 

CNOOC may renew efforts to get shareholder clearance to give its wholly State-owned parent, China National Offshore Oil Corp, priority in overseas takeovers that may eventually be transferred to the publicly traded unit, Fu said.

 

CNOOC's independent shareholders blocked a resolution to change the company's takeover rules on December 31.

 

Fu is seeking to cobble together smaller assets to give the company the global reach he has sought since taking the top job in October 2003.

 

"If there's an opportunity, we are always opportunists," Fu said.

 

In January, CNOOC paid US$60 million for a 35 percent working interest in the Nigeria OPL 229 oil contract. The following month, the company signed a production sharing contract to explore for oil and gas and develop an area offshore of Equatorial Guinea. On April 28, it concluded a similar deal in Kenya.

 

Nigeria's Akpo field, in which CNOOC bought a 45 percent stake, will start production in the first half of 2008, Chief Financial Officer Yang Hua said on January 9.

 

"Our strategy is to always make quick money, so that we can have a quick return because we're smaller than our competitors," Fu said.

 

China's oil consumption has more than doubled in a decade, outpacing domestic output and forcing refiners to boost imports from producers such as Angola and Saudi Arabia. The purchases have contributed to record-high oil prices.

 

CNOOC abandoned its cash bid for Unocal on August 2 last year, due to opposition from lawmakers who said a takeover by a Chinese company would infringe US national and economic security.

 

Chevron Corp, the second-largest US oil company, agreed to buy Unocal for US$17.8 billion.

 

(China Daily July 20, 2006)