By Wang Yu (China Daily)
Updated: 2007-10-24 10:05

China's top offshore oil company may list its base services arm in Shanghai next year, its spokesman said yesterday.

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"It's true that we are actively studying the option to reshuffle and list our technical and personnel services unit on the stock market, perhaps next year," Liu Junshan, spokesman for China National Offshore Oil Corp (CNOOC), told China Daily yesterday.

The unit, which is known as CNOOC Oil Base Group, will go public through an independent initial public offering rather than being injected into CNOOC's other listed arms, Liu said.

"That's because the unit's focus is not closely related to our core business, which is oil and gas exploration and production," Liu said.

CNOOC Oil Base, established in December 2004 with registered capital of 3.78 billion yuan, provides technical, equipment, human resource and logistics services.

The CNOOC spokesman refused to comment on future core businesses for CNOOC Oil Base, which now offers 10 categories of services, such as car rental, catering and communications.

"We'll keep our eyes open for other growth engines for the services units. The future core businesses of the firm are still subject to further study."

A source from CNOOC, who did not want to be named, told China Daily yesterday that CNOOC is demanding its base services arm reach the standard of mainland listing in terms of financial and operational data by next year. And if the market circumstances permit, there is a possibility for CNOOC to list the unit on the mainland market then.

"Our eventual target is to turn the unit into something more competitive, meeting listing standards," the source said.

CNOOC Oil Base, which accounts for 8 percent of CNOOC's total assets, notched up annual sales of more than 11 billion yuan in 2006, up 49 percent year-on-year. Its profit amounted to 1.1 billion yuan, up 26 percent year-on-year.

"In view of the decent financial performance of the firm, we are considering getting the unit listed," Liu said.

Liu Gu, an energy analyst with Guotai Jun'an Securities, said that if managed well, there is a chance for CNOOC Oil Base to surpass market expectations, though its core competence stems from traditional business, which may face more intense competition in open-market conditions.

The unit is expected to serve not only CNOOC and its affiliated arms, but also clients and customers from a board market environment, Liu said. That means CNOOC Oil Base will embrace more business opportunities and at the same time face more challenges.

"We are well aware of the challenges and intense competition that CNOOC Oil Base will face from these traditional business segments. However, since the unit is open to more business avenues, it will have new growth engines in the future," the CNOOC source said.