On April 11, China National Offshore Oil Co., Ltd. (hereinafter referred to as CNOOC, 0883. HK) issued several announcements to introduce the company’s initial public offering of RMB shares.
According to the introduction of CNOOC, the company will open the subscription on April 12, with the issue price set at 10.8 yuan / share and issue 2.6 billion to 2.99 billion shares for the development of oil and gas projects at home and abroad.
China’s offshore oil and gas giant landing A-Shares
Petrochina Company Limited(601857) ( Petrochina Company Limited(601857) . SH / 0857. HK) and China Petroleum & Chemical Corporation(600028) ( China Petroleum & Chemical Corporation(600028) . SH / 0386. HK), which have been listed on the A-share market for many years, have finally come to CNOOC, and the A-share market will also gather the three major oil companies in China.
CNOOC is the largest producer of offshore crude oil and natural gas in China and one of the largest independent oil and gas exploration and production groups in the world. It carries out oil and gas exploration, development and production in China’s Bohai Sea, South China Sea and East China Sea. Its overseas assets are spread in more than 20 countries and regions such as Indonesia, Australia, Nigeria, North America, Brazil and the United Kingdom.
By the end of 2020, about 57.9% of CNOOC’s net proved reserves and 67.4% of its net production came from China.
In August 2021, at the semi annual report meeting, CNOOC stated that the company was a red chip stock and would strive to realize its wish to return to a for listing if the policy allowed. In September of the same year, the CSRC issued the announcement on expanding the pilot scope of domestic listing of red chip enterprises to support high-quality red chip enterprises to issue securities for listing in the domestic capital market.
After receiving policy support, CNOOC quickly started the process of returning to a. On September 26, 2021, CNOOC announced that it planned to be listed on the main board of Shanghai Stock Exchange and raise no more than 35 billion yuan for the development of oil field projects outside China.
On February 24, 2022, CNOOC’s initial launch was approved; On March 30, CNOOC disclosed the prospectus while announcing the operating results of 2021.
According to the latest disclosed documents, CNOOC expects to raise a total of 28.08 billion yuan. If the over allotment option is fully exercised, CNOOC is expected to raise 32.292 billion yuan; The funds raised by the company will be mainly used for oil and gas field development and supplement working capital. The oil and gas field projects to be invested include many oil and gas field development projects in Guyana, Liuhua, Lingshui and LvDa in the South China Sea, as well as shore power application projects in Qinhuangdao and Caofeidian oil fields.
As of the afternoon closing of April 11, CNOOC’s share price on the Hong Kong Stock Exchange fell 4.29% to HK $11.16/share, with a market value of about HK $498.27 billion.
Since the beginning of 2022, with the recovery of global oil prices and the continuous tight situation of energy supply, the share price of CNOOC has also started to rise steadily all the way. Although it experienced a short-term decline in mid March, it still showed an overall upward trend. At present, the share price of CNOOC has risen by about 40% compared with the beginning of the year.
last year’s net profit exceeded 70 billion
In 2021, benefiting from the recovery of overall oil and gas prices and the growth of production and sales, “three barrels of oil” achieved significant growth. Compared with Petrochina Company Limited(601857) and China Petroleum & Chemical Corporation(600028) , CNOOC is slightly inferior in terms of company size and revenue data, but its profit level is more prominent.
In 2021, Petrochina Company Limited(601857) achieved a revenue of 2.6 trillion yuan, a new high over the years; The net profit attributable to the parent company was 92.17 billion yuan, a year-on-year increase of 385% China Petroleum & Chemical Corporation(600028) last year, the revenue reached 2.74 trillion yuan, an increase of 30.2% year-on-year; The net profit attributable to the parent company reached 71.975 billion yuan, a year-on-year increase of 115.2%.
According to the prospectus, CNOOC achieved a revenue of 246112 billion yuan in 2021, a year-on-year increase of 58.4%; The net profit attributable to the parent company was 70.3 billion yuan, a year-on-year increase of 181.77%; The annual net operating cash flow was 147.89 billion yuan, a year-on-year increase of 79.62%.
As of December 31, 2021, CNOOC’s total assets were 786568 billion yuan, an increase of 9.05% over the same period in 2020; The parent equity was 480912 billion yuan, an increase of 10.88% over the same period in 2020.
It is estimated in the prospectus that in the first quarter of 2022, CNOOC will achieve a revenue of about 69 billion yuan to 83 billion yuan, with a year-on-year increase of 32% to 58%; The net profit attributable to the parent company was 24 billion yuan to 28 billion yuan, with a year-on-year increase of 32% – 89%.
Since the sharp drop in oil prices in the first half of 2020, international oil prices have been rising steadily all the way. The geopolitical conflict in Eastern Europe after February has exacerbated the structural imbalance of the global oil and gas market, and the international oil price has set the highest level since 2008.
As a giant enterprise focusing on the upstream of the oil and gas industry, CNOOC is more sensitive to changes in energy prices than other upstream and downstream integrated oil and gas companies.
CNOOC announced that oil and gas prices are uncertain. If oil and gas prices show a downward trend and last for a long time, it may have an adverse impact on the company’s business, revenue and profits; The long-term low oil price will affect the company’s investment decision on the project.
CNOOC expects that the global economy will recover gradually, but there are still unstable and unbalanced problems in the recovery. Macroeconomic changes will affect oil and gas supply and downstream demand, which will have an adverse impact on the company’s performance.
increasing oil and gas reserves and production and developing new energy
In recent years, major economies around the world have set goals and routes of carbon peaking and carbon neutralization, vigorously develop new energy and promote the transformation of green and low-carbon energy. Traditional oil and gas companies are facing increasing environmental pressure and more competitive pressure from renewable energy.
At the same time, the frequent occurrence of geopolitical crises, the global economic recovery and the recovery of energy demand have led to a tight supply situation in the energy market, the sharp rise of major energy prices, and ensuring energy security has become the focus of attention of major economies.
In recent years, China’s three major oil companies have implemented the strategy of “increasing reserves and production” of oil and gas, the upstream capital expenditure has increased continuously, and the oil and gas production has also rebounded steadily.
In 2021, CNOOC’s net oil and gas output reached 573 million barrels of oil equivalent, reaching a new high; The proved reserves reached 5.728 billion barrels of oil equivalent, and the reserve substitution rate reached 162%, which remained above 130% for three consecutive years.
At the financial report meeting held on March 30, CNOOC introduced that CNOOC’s capital expenditure in 2022 will be 90-100 billion yuan, and 13 new projects will be put into operation during the year. In the next three years, CNOOC’s oil and gas production target will maintain rapid growth. It is expected to be Shanghai Zhongyida Co.Ltd(600610) million barrels of oil equivalent in 2022, 640650 million barrels of oil equivalent in 2023 and 680690 million barrels of oil equivalent in 2024. Its production growth mainly comes from Bohai Sea, South China Sea and Stabroek block in Guyana.
In addition to the traditional oil and gas industry, CNOOC is also constantly promoting low-carbon transformation and promoting the development of renewable energy while increasing the exploration and development of natural gas industry. In 2021, CNOOC’s first offshore wind power project was fully connected to the grid for power generation, and the first offshore carbon dioxide storage demonstration project was also launched.
As an enterprise with resources and technological advantages at sea, CNOOC will mainly promote the large-scale development of wind power projects in the field of new energy, and will also increase investment in the onshore wind power industry. According to CNOOC’s previous introduction, during the whole “14th five year plan” period, the company’s development goal for onshore photovoltaic and onshore wind power is no less than 5 million KW, and the annual investment proportion is 5% – 10%.
