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Mergers and future opportunities to drive company's medium to long-term growth

BEIJING/HONG KONG – China National Offshore Oil Corp (CNOOC) said overseas acquisitions and discoveries at home will drive the company's growth after record output helped more than double profit in the first six months.

"Contribution from overseas assets is expected to rise steadily," Chairman Fu Chengyu said in yesterday's earnings statement.

Apart from adding reserves in China, "merger and acquisition opportunities will also be an important driving force for the company's medium- and long-term growth."

CNOOC rose in Hong Kong trading after reporting oil production outside China more than doubled to 17 million barrels in the first half. Fu bought a $3.1 billion (Dh11 billion) stake in Argentina's Bridas Corp this year, expanding CNOOC's interests beyond Australia, Africa and Southeast Asia as the company seeks to boost output by 28 per cent in 2010.

"CNOOC can afford to spend up to $10 billion on acquisitions overseas and it seems to be concentrating on Africa and South America," said Neil Beveridge, an analyst at Sanford C. Bernstein & Co in Hong Kong.

Untapped
"China's offshore resources are relatively untapped and it's still making discoveries there which will fuel future growth, but it's also increasingly looking abroad and becoming an international company."

Net income climbed to 25.99 billion yuan (Dh14 billion), or 0.58 yuan a share, from 12.4 billion yuan, or 0.28 yuan, a year earlier, CNOOC said on Thursday. That beat the 23 billion yuan median estimate of six analysts surveyed by Bloomberg News. Revenue more than doubled to 83 billion yuan.

Earnings growth exceeded gains at Exxon Mobil and Royal Dutch Shell as CNOOC ramped up output 41 per cent to a record after China led the world out of recession.