Stock Research and Analysis
by Allen GoodA domestic market hungry for energy and an advantageous regulatory position provide CNOOC Limited with continued promise.
On a purely operational basis, we like CNOOC Limited's sole focus on exploration and production of oil and natural gas, which spares it the volatility and razor-thin margins normally associated with refining operations. Read more
On a purely operational basis, we like CNOOC Limited's sole focus on exploration and production of oil and natural gas, which spares it the volatility and razor-thin margins normally associated with refining operations. Read more
Bulls Say
Exclusive rights to partner with foreign companies on offshore China production give the company a significant advantage over their Chinese competitors.
Many areas of offshore China have yet to be explored, offering great potential for future discoveries.
With expectations of continued economic growth in China, CNOOC Limited has a growing market for distribution.
With investment in LNG infrastructure and natural gas resources already in place, the company can capitalize on expected growth in natural gas demand. Read more
Bears Say
China may have to relax some protectionist policies that favor the company to comply with WTO and other global trade regulations.
An appreciating Chinese currency will hurt revenue and profits.
Government control of the company may mean national interests take precedence over investors' interests.
International expansion in search of resources means higher production costs and competition with experienced foreign firms.
China's economy is experiencing slowing growth, as the rest of the world is in a recession. Demand growth for petroleum is declining as a result. Read more
Strategy
CNOOC Limited has a strategy of expanding its resource and production base while developing domestic natural gas distribution infrastructure. Exploration, independently and through partnerships, will continue in offshore China with international expansion focused on securing natural gas resources for distribution within China. Read more
Management
CNOOC Limited's management team benefited from working with foreign oil companies for many years on offshore projects. They took the knowledge gained from these experiences and applied it to their own independent operations. Despite this experience, decisions are ultimately made by the Chinese government via its control of CNOOC. Read more
Profile
CNOOC Limited is China's third-largest oil and gas company focusing on exploration and production of resources in offshore China. Through its parent company, it has the exclusive right to partner with foreign companies in offshore production. Read more
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