(Yicai Global) April 1 -- China National Offshore Oil Corporation opened subscriptions to its new share sale on the Shanghai stock exchange yesterday, which looks set to raise the Chinese offshore oil giant as much as CNY35 billion (USD5.5 billion) should the overallotment option be exercised.

CNOOC has begun allowing subscriptions and price enquiries, China’s largest producer of offshore crude oil and natural gas said in its share issuance letter of intent yesterday. The secondary listing was greenlit by the Shanghai bourse on Feb. 24 and by regulators on March 30.

The oil major is planning to issue 2.6 billion shares, around 5.5 percent of the firm’s total share capital once issued, to raise CNY30.4 billion (USD4.8 billion), according to the listing prospectus. Should it exercise the greenshoe option, which allows underwriters to allocate an additional 15 percent of shares at the same offering price for 30 days after the date of listing, this will increase the number of shares for sale to almost 3 billion, around 6.28 percent of total share capital.

CNOOC’s listing in Shanghai has generated a lot of interest as it will be the mainland’s biggest so far this year, but comparatively speaking it is not a particularly large listing, a market insider told Yicai Global. Telecoms operators China Mobile and China Telecom both raised over CNY50 billion (USD7.9 billion) when they went public last year. Also, only around half of CNOOC’s shares on offer will be sold publicly and the rest will be sold through the strategic placement of shares, he added.

Some CNY1.01 trillion (USD159.8 billion) was traded each day on both the Shanghai and Shenzhen stock exchanges last month so CNOOC’s new share sale is not expected to have a big impact on liquidity, the person said. Once CNOOC goes public in Shanghai, all three of the country’s big state-owned oil companies will be trading on the Shanghai Stock Exchange.

Record Performance

CNOOC’s timing is significant as just yesterday it posted all-time high profit of CNY70.3 billion (USD11 billion) for 2021, a more than two-and-a-half-time surge from the year before, on record output and surging international oil prices. Revenue jumped 58.4 percent to CNY246.1 billion (USD38.7 billion).

The company’s output of crude oil and natural gas climbed 8.5 percent last year from the year before to 573 million barrels of oil equivalent, the most ever. The average price of oil surged 65.7 percent from a year earlier to USD67.89 per barrel and that of natural gas soared 12.6 percent to USD6.95 per kilo cubic feet.

In the first quarter, the Beijing-based firm is expecting profit to jump as much as 89 percent from the same period last year to CNY28 billion (USD4.4 billion) while revenue could leap up to 58 percent to CNY83 billion.

CNOOC’s Hong Kong-listed shares [HKG:0883] were trading up 2.23 percent at HKD10.98 (USD1.40) as of 2:30 p.m. China time today. On March 30 they hit their highest level since January 2020 at HKD11.20.

Editors: Liao Shumin, Kim Taylor