China National Offshore Oil Corporation

China National Offshore Oil Corporation

File:CNOOC logo.svg Logo of China National Offshore Oil Corporation
Company type	State-owned enterprise
Industry	Oil and gas industry
Founded	January 30, 1982 (1982-01-30) in Beijing, China
Headquarters	Beijing , China
Area served	Worldwide
Key people	Fu Chengyu (former chairman/CEO), Wei Liucheng (former CEO)
Products	Offshore crude oil and natural gas exploration, development, production; LNG; chemical and fertilizer manufacturing; natural gas distribution; power generation; financial services and insurance
Owner	State-Owned Assets Supervision and Administration Commission of the State Council (SASAC)
Number of employees	98,750+
Parent	Government of China
Website	www.cnooc.com.cn

China National Offshore Oil Corporation, commonly known as CNOOC Group (), ranks as the third-largest state-owned oil enterprise in China, following CNPC and China Petrochemical Corporation. The company focuses on the exploration, development, and production of offshore crude oil and natural gas resources within China, with operational support from its subsidiary COOEC.

As a government-owned entity, its shareholder interests are overseen by the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC). Its subsidiary, CNOOC Limited, is listed on the Hong Kong Stock Exchange, while China Oilfield Services trades on both the Hong Kong and New York Stock Exchanges. CNOOC's global business stature has risen significantly, moving from 126th place in the 2020 Forbes Global 2000 rankings to 85th in 2023.

History

CNOOC was established on January 30, 1982, following regulations by the State Council concerning petroleum resource management with foreign firms. This incorporation granted CNOOC exclusive rights to manage offshore oil and gas exploitation across China. Headquartered in Beijing, the corporation holds registered capital amounting to RMB 94.9 billion and employs a workforce exceeding 98,750 individuals.

In January 2012, an offshore oilfield vessel valued at $117 million capsized while under construction at a dock in eastern China. The vessel was subsequently recovered without causing environmental contamination.

Following the 2022 Russian invasion of Ukraine, CNOOC maintained its operations in Russia, a decision that led Ukraine to classify the company as an International Sponsor of War.

Unocal acquisition bid

In June 2005, CNOOC Limited, a subsidiary listed on both the NYSE and Hong Kong exchanges, submitted an $18.5 billion cash proposal to acquire the American oil firm Unocal Corporation, exceeding ChevronTexaco’s competing offer. Unocal’s assets in Central Asia were strategically aligned with CNOOC’s expansion objectives. Nevertheless, on July 20, 2005, Unocal accepted ChevronTexaco’s $17.1 billion bid. Subsequently, CNOOC Limited withdrew its offer on August 2 due to escalating political tensions in the United States.

Although opposition from the Bush administration was limited, bipartisan Congressional resistance emerged over concerns that approximately $13 billion of CNOOC’s bid was backed by the Chinese government. This raised questions regarding market competition fairness and national security risks related to foreign control over sensitive oil technology. Despite The Economist disputing these concerns and CNOOC’s willingness to undergo U.S. security reviews, Congressional delays ultimately discouraged the bid.

Goldman Sachs served as financial advisor to CNOOC Limited throughout this process. Known for operating independently from direct Chinese government directives, CNOOC had not informed officials prior to placing its bid. The political backlash in the U.S. prompted China to strengthen regulatory oversight over its companies to safeguard Sino-American relations.

Within China’s domestic market, CNOOC faces rivalry as competitors CNPC and Sinopec obtained rights for offshore exploration that were once exclusive to CNOOC. Following China’s accession commitments to the World Trade Organization, foreign firms such as ExxonMobil and BP entered this sector by 2006. Additionally, smaller Chinese companies have sought to challenge the dominance held by the nation's three major state-owned oil corporations.

Together with the unsuccessful 2009 acquisition attempt by Aluminum Corporation of China for Rio Tinto, CNOOC’s failed Unocal bid was widely viewed in China as part of Western efforts aimed at restricting China's economic advancement.

Acquisition of Nexen

On July 23, 2012, CNOOC reached an agreement to purchase Nexen for $15.1 billion, representing the largest foreign acquisition by a Chinese firm at that time and boosting Nexen's share price by 61%. This transaction required clearance under Canada's Investment Canada Act as well as approval from the Committee on Foreign Investment in the United States. The Canadian authorities granted consent on December 7, 2012, followed by U.S. regulatory endorsement on February 12, 2013.

Developments from 2014 Onward

In June 2014, CNOOC secured a $20 billion LNG supply agreement with BP. Concurrently, the company progressed with a project near the Weizhou Island Terminal, situated close to the border with Vietnam.

CNOOC experienced a significant drop in net earnings in 2016, posting $92.5 million—a decline of 97% compared to the previous year.

On June 5, 2018, CNOOC Gas and Power Group, a subsidiary recognized as China’s largest LNG importer and terminal operator, entered into a memorandum of understanding (MOU) with Philippine fuel company Phoenix Petroleum to develop an LNG receiving terminal within the Philippines.

In September 2018, CNOOC formalized an MOU with the Nigerian National Petroleum Corporation aimed at cooperation in biofuel production.

By 2019, CNOOC was honored with the National Award for Science and Technology Progress from China’s State Council in recognition of its exploration successes in the Bohai Bay Basin.

Profits doubled by 2022, reaching $20.6 billion compared to $10.2 billion the year before, alongside an 8.9% rise in total oil and gas production.

In August 2023, CNOOC and Petrobras agreed on strategic collaboration encompassing oil refining, chemical engineering, engineering services, green and low-carbon energy initiatives, and crude oil trading. This partnership complements CNOOC’s existing stakes in Brazil: a 7.34% interest in the deepwater Buzios field and a 9.65% share in the Mero oil field development.

Earlier in May 2023, CNOOC inaugurated the «Haiyou Guanlan» deep-sea floating wind farm near Wenchang oil fields located in the South China Sea. With an installed capacity of 7.25 MW, this facility can produce up to 22 million kWh annually, conserving nearly 10 million cubic meters of natural gas and cutting carbon dioxide emissions by approximately 22,000 tons each year.

CNOOC Energy Holdings USA was divested to INEOS in December 2024 for $2 billion.

Operations

CNOOC’s business spans six primary sectors: exploration and development of oil and gas; technical service provision; logistics; chemical and fertilizer manufacturing; natural gas distribution and power generation; along with financial services and insurance. In 2004, reported revenues reached RMB70.92 billion with net profits totaling RMB24.22 billion and tax contributions amounting to RMB12.09 billion—representing increases of 32%, 62%, and 80%, respectively, over the previous year. Total assets stood at RMB153.26 billion while net assets were RMB83.06 billion, marking growths of 28% and 21%. Among Chinese state-owned enterprises, CNOOC ranked fifth in gross profit and twelfth in total assets. Credit rating agencies Standard & Poor's and Moody's assigned long-term ratings of BBB+ and A2 respectively—equivalent to China’s sovereign rating—the highest granted to any Chinese corporation.

Oil and gas output expanded steadily during 2004, reaching 36.48 million tons of oil equivalent (TOE), up by 9% compared to 2003. Domestic production increased by 11% to reach 24.72 million TOE, outperforming the national average growth rate of 3%. Annual production from Bohai Bay surpassed 10 million TOE, establishing it as a vital offshore energy hub in northern China.

CNOOC Gas and Power concentrates on natural gas distribution and electricity generation activities, positioning CNOOC as China’s leading liquefied natural gas (LNG) producer. The company secured midstream and downstream contracts for LNG projects in Guangdong and Fujian provinces, importing volumes of 3.5 million tons per annum (MTPA) from Australia’s North West Shelf and an additional 2.6 MTPA from Indonesia’s Tangguh field operated by BP. Construction began on LNG facilities in Zhejiang and Shanghai while cooperation agreements were signed for LNG development projects across Liaoning, Tianjin, Hebei, Hainan, and Jiangsu provinces. Responsibilities include building LNG receiving terminals, main pipeline infrastructure, and gas-fired power stations along the southern coastline extending to the Yangtze River.

In April 2004, CNOOC-SINOPEC United International Trading obtained authorization to import crude oil alongside CNPC, Sinopec, Sinochem, and Zhuhai Zhenrong. By July that year, the National Development and Reform Commission approved the Nanhai Refinery Project—a joint venture with Royal Dutch Shell designed for an annual capacity of 12 million tons—making it the largest joint venture refinery project in China at that time. Shell also constructed a $4.3 billion ethylene plant but later abandoned plans for a $2.4 billion refinery development in 2007.

CNOOC Limited saw its share price climb by 37% during 2004 resulting in a market capitalization of RMB181.68 billion. Shares of CNOOC Engineering surged by over 66%, while China Oilfield Services reached a market value of RMB10.1 billion. Collectively, these subsidiaries’ market capitalization approached RMB200 billion—approximately three times their net asset value. The company continued expanding its exploration efforts domestically and abroad while developing midstream and downstream operations with ambitions to become a fully integrated modern energy enterprise by 2008.

Under leadership including former CEO Wei Liucheng (later governor of Hainan) and chairman/CEO Fu Chengyu, CNOOC pursued strategic acquisitions: acquiring five Indonesian blocks from Repsol in 2002 which established it as Repsol’s largest offshore operator; purchasing a 5.3% stake in Australia’s North West Shelf project in 2003 securing LNG supplies for Guangdong; acquiring a 12.5% interest in Tangguh for Fujian LNG supply; although an attempt to acquire part of Australia’s Gorgon field was unsuccessful.

In December 2008, CNOOC announced discovery of light oil and gas reserves estimated at approximately 100 million tons at Jinzhou field (25-1) located within Bohai Bay. In May 2009, it unveiled plans for a $4.38 billion coal-based natural gas project situated in Shanxi province.

The company auctioned oil blocks at Wushi oil field off Zhanjiang—a region known for untapped rich reserves—in early 2010.

By June 2021 production commenced at Phase II of Weizhou oilfield (11-2) located in the Gulf of Tonkin; simultaneously Lingshu deepwater gas field (17-2) began output—marking China’s first independently operated deepwater gas project.

LNG terminals

CNOOC pioneered the introduction of liquefied natural gas (LNG) to China through its Dapeng LNG Terminal located in Guangdong, which received its inaugural shipment from the NWS LNG project in Australia in July 2006.

Planned CNOOC LNG Terminals

Name	Location	Commissioning Year	Capacity (MTPA)	CNOOC Stake
Dapeng LNG	Guangdong	2006	3.7	33%
Putian LNG	Fujian	2007	2.6	60%
Yangshan LNG	Shanghai	2008	3.0	45%
Ningbo LNG	Zhejiang	2009	3.0	51%
Hainan LNG	Hainan	2009	3.0	65%
Qinhuangdao LNG	Hebei	2010	2.0	N/A
Binhai LNG	Jiangsu	2010–	3.0	N/A
Yingkou LNG	Liaoning	2010–	3.0	N/A
Zhuhai LNG	Guangdong	2010–	N/A	N/A

Activities in Africa

By 2023, African assets represented 2% of CNOOC's total reserves and contributed 5% to its daily production output. In Uganda, CNOOC manages the Lake Albert basin project alongside partners Total and Tullow Oil. Additionally, the company maintains investment interests in Nigeria, Senegal, the Republic of Congo, Algeria, and Gabon.

CNOOC is advancing plans for an LNG facility in Mozambique and has secured agreements to acquire a significant portion of its production.

Alleged links to drug trafficking

In 2004, a contract-sharing arrangement in Myanmar involved Myanmar Oil and Gas Enterprise, China Huanqiu Contracting and Engineering Corporation, and Golden Aaron—a Singapore-based joint venture partner of CNOOC—associated with the family of Lo Hsing Han, infamously dubbed the "godfather of heroin." The U.S. Treasury indicated in 2008 that CNOOC collaborates with organizations tied to this family.

Human rights concerns in Myanmar

Conflicts over labor conditions and wages erupted in 2007 between Burmese workers and CNOOC personnel, resulting in arrests.

In 2008, accusations emerged against CNOOC regarding human rights violations and environmental harm on Ramree Island, sparking resistance from local communities. The company's operational methods have been likened to coercive rural development tactics observed within China. The Shwe gas initiative has been connected with land seizures and rights infringements.

Forced relocation issues in Uganda

CNOOC has faced allegations concerning forced displacement and related abuses linked to its Kingfisher project at Lake Albert (Uganda), where construction is underway for a central processing facility as part of a future pipeline extending to Tanzania. Production at Kingfisher is anticipated to commence by 2026.

Role in Falun Gong persecution

The company has been accused of cooperating with the Chinese Communist Party in repressing Falun Gong practitioners by dispatching employees to labor camps and brainwashing centers, reducing their remuneration, and withholding benefits unless they renounced their spiritual practices.

Oil spills in Bohai Bay

On June 4, 2011, a leak occurred on the seafloor at the Penglai 19-3 oilfield—operated jointly by U.S.-based ConocoPhillips—which lasted until June 7. A subsequent leak on June 17 was contained within two days. These incidents contaminated more than 840 square kilometers of Bohai Bay waters. Ownership of the oilfield is divided between CNOOC (51%) and ConocoPhillips (49%). The initial spill was not made public until July 5, 2011. Another fire coupled with an oil spill started on April 6, 2021, at the Penglai platform, with reports indicating missing personnel among workers.

Explosion at Huizhou Refinery

On July 11, 2011, a blast took place at the refinery situated within the Daya Bay Economic and Technical Development Zone in Guangdong, positioned near the Daya Bay Nuclear Power Plant.

U.S. Sanctions

In December 2020, the United States Department of Defense identified CNOOC as an entity "owned or controlled" by the People's Liberation Army, resulting in a prohibition on American investments pursuant to Executive Order 13959. Subsequently, the New York Stock Exchange initiated the process of removing CNOOC's listing in February 2021.