CNOOC's logo is displayed in front of the company's Beijing headquarters. Photo: VCG

 

Chinese oil giant China National Offshore Oil Corp (CNOOC) said on Monday it will raise 28.08 billion yuan ($4.41 billion) in a listing at the A-share market, and investors could start purchasing its stocks from Tuesday. 

CNOOC's return to home market could further improve its financing and profitability, providing more guarantee for the nation's energy security, analyst said.

The state-owned company will issue 2.6 billion shares at 10.80 yuan per share. Fundraising will be expanded to 32.29 billion yuan assuming the exercise of the over-allotment option in full, the company said in a prospectus sent to the Hong Kong Stock Exchange.

The proceeds will be used to develop the company's main business in its oil and gas field development projects at home and abroad.

CNOOC's landing on the A-share market will help it expand financing channels and improve its capital structure, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Monday.

"With its financing channel smoothed, its major businesses could operate normally, which also means a lot in terms of providing more guarantees for the nation's energy supply security," Dong said.

The state-owned giant, often known as one of China's "three barrels of oil", went public on both the Hong Kong and New York Stock Exchanges in February 2001.

In recent years, the A-share market has matured, Dong said. Compared with the Hong Kong stock market, it has higher liquidity and premiums are higher as well. The A shares of the other two oil giants, PetroChina and Sinopec, both have a premium over their H shares.

CNOOC's overseas financing channels have seen some blockages over the past year, which is a major factor propelling the oil giant to return to the mainland stock market. 

Its Shanghai listing came after being delisted by the New York Stock Exchange (NYSE) in October last year when Washington clamped down on an array of Chinese firms with alleged links to the Chinese military, which started under the previous US administration of president Donald Trump. 

PetroChina and Sinopec are already listed in Shanghai.

CNOOC's return to the A-share market comes as global energy prices are soaring, pushed up by the Russia-Ukraine conflict, making the company a high-quality investment target with a steady profit performance. Unlike its two rivals, as a scarce upstream investment target, CNOOC is expected to bring new investment opportunities to the A-share market, said Dong.

From 2018 to 2020, CNOOC achieved net profits of 52.7 billion yuan, 61 billion yuan, and 25 billion yuan, respectively, Last year, its profits surged to 70.3 billion yuan, up 182 percent and a record high.