China National Offshore Oil Corporation

When the State Council implemented the regulation of the people's petroleum resources in cooperation with foreign enterprises on January 30, 1982, CNOOC was incorporated and authorized to assume overall responsibility for the exploitation of oil and gas resources of offshore China in cooperation with foreign partners, which ensured monopoly status for CNOOC in offshore oil and natural gas. With its headquarters in Beijing, CNOOC registered with capital of RMB 94.9 billion and has more than 98,750 employees.

In January 2012, one of CNOOC's offshore oilfield vessels capsized while it was under construction at a dock in east China. The $117 million ship was salvaged and did not cause any pollution according to CNOOC.

Following the 2022 Russian invasion of Ukraine the company continued doing business in Russia. For this reason Ukraine listed CNOOC as an International Sponsor of War.

Unocal buyout attempt

In June 2005, a CNOOC Group company (NYSE and Hong Kong-listed public company CNOOC limited) made an $18.5 billion cash offer for American oil company Unocal Corporation, topping an earlier bid by ChevronTexaco. Unocal's oil interests in Central Asia were considered a strategic fit for the company. On July 20, 2005, Unocal announced that it had accepted a buyout offer from ChevronTexaco for $17.1 billion, which was submitted to Unocal stockholders on August 10. On August 2 CNOOC Limited announced that it had withdrawn its bid, citing political tensions in the United States.

Despite a hands-off approach from the Bush administration, a group of Democrats and Republicans in Congress organized opposition to the CNOOC Limited bid. They argued that with $13 billion of CNOOC Limited's bid for Unocal coming from the Chinese government, the offer was not a free market transaction. American corporations were prohibited from purchasing assets in China, and it was also argued that foreign, communist ownership of oil assets might be a regional and economic-security risk; Unocal had sensitive deep-sea exploration and drilling technology. The Economist and other sources tried to discredit the security threat, and CNOOC was willing to undergo a US security review. Congressional delays and calls for inquiry deterred the CNOOC Limited bid.

The company was advised by Goldman Sachs. CNOOC Limited had a reputation for acting independently of the Chinese government, and had not notified government officials before bidding for UNOCAL. The political backlash in the United States caused the Chinese government to increase its oversight of Chinese companies, to avoid future risks to Sino-American relations.

CNOOC Limited faces challenges in the domestic market. Its rivals, CNPC and Sinopec, have been permitted to conduct offshore exploration once monopolized by CNOOC Limited. In accordance with the commitment by the Chinese government to join the World Trade Organization, the oil market will be opened to non-Chinese companies (such as ExxonMobil and BP) by the end of 2006. CNOOC Limited's smaller domestic competitors have been trying to break the monopoly of the three major NOCs in the industry.

In conjunction with 2009 failed deal between Aluminum Corporation of China and mining giant Rio Tinto, CNOOC's failed UNOCAL deal was perceived in China as part of a coordinated effort in the West to hinder China's economic growth.

CNOOC operates in six business sectors: exploration and development of oil and gas; technical services; logistic; chemical and fertilizer production; natural gas and power generation, and financial services and insurance. In 2004, the company generated revenue of RMB70.92 billion, a net profit of RMB 24.22 billion and RMB 12.09 billion in taxes (up 32 percent, 62 percent and 80 percent, respectively, from the previous year). By the end of 2004 total and net assets had reached RMB153.26 billion and 83.06 billion, a 28- and 21-percent increase from the beginning of the year. The company is fifth and twelfth in gross profits and total assets of state-owned enterprises in China. Standard & Poor's and Moody's Investors Service assigned CNOOC a long-term BBB+ and A2, equivalent to China's government rating and the highest rating for a Chinese company.

The exploration and production of oil and gas grew steadily in 2004. Output reached 36.48 million tons of oil equivalent, increasing 3.12 million tons (nine percent) over 2003. Domestic production was 24.72 million tons, an 11-percent increase from the previous year and higher than the average national growth rate of three percent. The annual output in Bohai Bay exceeded 10 million tons of oil equivalent for the first time, making it the second offshore area producing over 10 million tons (after the Eastern South Sea) and an energy-production base in northern China.

CNOOC has established CNOOC Gas and Power, which focuses on gas distribution and power generation. CNOOC has become China's dominant producer of liquefied natural gas. The company signed all mid- and downstream contracts for the Guangdong and Fujian LNG projects and imported 3.5 million tons per annum (MPTA) and 2.6 MPTA of LNG, respectively, from Australia's North Western Shelf (NWS) and Indonesia's Tangguh fields (operated by BP). LNG projects in Zhejiang and Shanghai began construction, and CNOOC signed HOAs for LNG cooperation with Liaoning, Tianjin, Hebei, Hainan and Jiangsu. CNOOC has completed its preliminary strategic natural-gas deployment in southern coastal areas up to the Yangtze River. In these projects, CNOOC is responsible for constructing LNG receiving terminals and trunk lines for gas transmission and gas-fired power plants.

In April 2004, the Ministry of Commerce authorized CNOOC-SINOPEC United International Trading to import crude oil; CNPC, Sinopec, Sinochem and Zhuhai Zhenrong had been the only companies importing crude. In July the NDRC approved the Nanhai Refinery Project, a joint venture between CNOOC and Royal Dutch Shell and the largest joint venture ever in China (with an annual capacity of 12 million tons). CNOOC had an integrated industrial portfolio as it expanded into refining. Shell built a $4.3 billion JV ethylene plant, but announced in 2007 that it would not build a $2.4 billion refinery.

Controversy

Drug-trafficking ties

In October 2004, contract-sharing was negotiated in Burma by Myanmar Oil and Gas Enterprise, China Huanqiu Contracting and Engineering Corporation and CNOOC's Singaporean joint-venture partner, Golden Aaron. Golden Aaron is run by Cecilia Ng, wife of Steven Law; Law is the son of Lo Hsing Han, known as the "godfather of heroin". In 2008, the US Treasury intimated that CNOOC cooperates with a company run by a family known for heroin trafficking.

Human-rights abuses in Burma

In 2007, CNOOC was involved in a clash with Burmese workers who threw stones at the company offices. Ten workers from Kyaukphyu were detained and questioned by authorities after a dispute with CNOOC over low wages, long hours, reported underpayment and the mistreatment of inhabitants.

In 2008, CNOOC was accused of abuses of human rights in Burma. Arakan Oil Watch stated in a report that the company "left behind such a trail of abuses and environmental contamination on Ramree Island that outraged locals attacked their facilities". CNOOC's actions in Burma have been compared to that of communist officials in rural China, where entrepreneurs desiring development opposed by local residents steamroll their opposition. The Shwe gas project has been linked with land confiscation and human-rights abuses.

Forced displacement in Uganda

Allegations of displacement and other abuses of the local population were made against CNOOC relating to its Kingfisher project at Lake Albert (Uganda), where a central processing facility construction is taking place as part of the planned pipeline to Tanzania. The Kingfisher project is said to begin production in 2026.

Falun Gong persecution

CNOOC has been accused of participating in the persecution of Falun Gong by collaborating with the Chinese Communist Party to send Falun Gong CNOOC employees to labour camps and mind-control facilities, reducing their pay and preventing them from receiving benefits (or regular wages) unless they renounce their beliefs.

Bohai Bay oil spills

On June 4, 2011, the U.S. company ConocoPhillips, operating in the Penglai 19-3 oilfield, caused an oil spill from a seafloor leak which lasted until June 7. This was followed by a second leak on June 17, which was contained within 48 hours. The leaks polluted a total of more than 840 square kilometers of clean water in Bohai Bay. Fifty-one percent of the oilfield is owned by CNOOC, and forty-nine percent owned by ConocoPhillips. The first leak was not made public until July 5, 2011.