China’s state-run offshore oil and gas major CNOOC Ltd said it plans to raise up to 35 billion yuan ($5.41 billion) in a new share issue on the Shanghai stock exchange to fund several key oil and gas projects.
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 plans to issue no more than 2.6 billion shares in the Chinese currency, or about 5.82% of company’s share capital, the firm said in a filing to the Hong Kong stock exchange late on Sunday.
“We see the A-share initial public offering as a reasonable move for CNOOC to maintain its fast pace of production growth amid difficulty in overseas financing due to the U.S. sanctions,” Daiwa said in a research note.
The funds will be used to finance key projects such as the Payara oilfield in Guyana, its first wholly-owned deepwater gas project Lingshui 17-2 and oilfield Liuhua 11-1/4-1, both in the South China Sea.
China’s policy to encourage more domestic listing is another driver for this fundraising plan, said a Beijing-based industry official.
CNOOC’s Hong Kong-listed shares last traded up 5.7% on Monday at HK$8.53 around 0400 GMT, having gained 14.5% so far this year.
($1 = 6.4662 Chinese yuan renminbi)