Friday, March 30, 2007
CNOOC CHIEF DECRIES SPREAD OF PROTECTIONISM
By Tom Mitchell and Robin Kwong in Hong Kong
Friday, March 30, 2007, FT
The head of China's largest offshore oil producer has decried rising protectionism in developed and developing markets alike, with the US singled out as the worst offender.
“The resurgence of protectionism, especially in US-led developed countries, has been rather surprising,” Fu Chengyu, chairman of CNOOC, said at his company's results briefing in Hong Kong yesterday.
“Protectionism has spread from developed countries to all countries,” he added. “Government and companies alike should work together to reduce protectionism and promote free trade.”
Mr Fu led the charge on what would have been the largest Chinese overseas acquisition – a proposed $18bn takeover of California-based Unocal in 2005. The deal foundered after US politicians attacked the proposed transaction on nationalist grounds and CNOOC withdrew, ceding Unocal to rival US bidder Chevron.
Mr Fu's comments also came against a backdrop of greater state control over energy resources in countries such as Russia and Venezuela in recent years. With China's domestic oilfields rapidly ageing, CNOOC and its local peers have increasingly relied on foreign acquisitions to boost their output.
It is rare for the captains of China's largest state-owned enterprises to make such criticism and this reflects how the pursuit of overseas reserves has exposed China's national resource companies to political risks with which they have had very little experience.
Chinese technology and consumer groups have had better luck snapping up overseas rivals, as epitomised by Lenovo's acquisition of IBM's PC business. But these have been welcome sales of troubled businesses.
Mr Fu yesterday sounded a conciliatory note on the development of offshore gas fields in the East China Sea, to which both China and Japan have laid claim.
“The Chinese government made the decision to jointly develop the East China Sea [fields] with Japan a long time ago, but because of national issues the co-operation has never really gone anywhere,” he said, adding that CNOOC was “actively discussing co-operation with Japanese companies”.
Last week, senior Japanese government officials told the Financial Times that they were preparing new laws authorising protection of offshore oil and gas rigs.
The passage of the laws could increase tensions in the East China Sea, but is not expected ahead of Chinese prime minister Wen Jiabao's visit to Tokyo next month.
CNOOC reported record net profits of Rmb30.9bn ($4bn) last year, up 22 per cent from 2005. Revenues increased 28 per cent to Rmb88.9bn. ¶ 10:45 AM
Friday, March 30, 2007, FT
The head of China's largest offshore oil producer has decried rising protectionism in developed and developing markets alike, with the US singled out as the worst offender.
“The resurgence of protectionism, especially in US-led developed countries, has been rather surprising,” Fu Chengyu, chairman of CNOOC, said at his company's results briefing in Hong Kong yesterday.
“Protectionism has spread from developed countries to all countries,” he added. “Government and companies alike should work together to reduce protectionism and promote free trade.”
Mr Fu led the charge on what would have been the largest Chinese overseas acquisition – a proposed $18bn takeover of California-based Unocal in 2005. The deal foundered after US politicians attacked the proposed transaction on nationalist grounds and CNOOC withdrew, ceding Unocal to rival US bidder Chevron.
Mr Fu's comments also came against a backdrop of greater state control over energy resources in countries such as Russia and Venezuela in recent years. With China's domestic oilfields rapidly ageing, CNOOC and its local peers have increasingly relied on foreign acquisitions to boost their output.
It is rare for the captains of China's largest state-owned enterprises to make such criticism and this reflects how the pursuit of overseas reserves has exposed China's national resource companies to political risks with which they have had very little experience.
Chinese technology and consumer groups have had better luck snapping up overseas rivals, as epitomised by Lenovo's acquisition of IBM's PC business. But these have been welcome sales of troubled businesses.
Mr Fu yesterday sounded a conciliatory note on the development of offshore gas fields in the East China Sea, to which both China and Japan have laid claim.
“The Chinese government made the decision to jointly develop the East China Sea [fields] with Japan a long time ago, but because of national issues the co-operation has never really gone anywhere,” he said, adding that CNOOC was “actively discussing co-operation with Japanese companies”.
Last week, senior Japanese government officials told the Financial Times that they were preparing new laws authorising protection of offshore oil and gas rigs.
The passage of the laws could increase tensions in the East China Sea, but is not expected ahead of Chinese prime minister Wen Jiabao's visit to Tokyo next month.
CNOOC reported record net profits of Rmb30.9bn ($4bn) last year, up 22 per cent from 2005. Revenues increased 28 per cent to Rmb88.9bn. ¶ 10:45 AM
