CNOOC Eyeing Foreign Gas Field for Expansion

CNOOC Ltd should soon be announcing a farm-in agreement for a foreign gas field, according to one source. The deal is valued at US $300 - $500 million. CNOOC will unveil the plan immediately after Beijing selects a supplier for the country's first liquefied natural gas terminal. The winner of the long-term supply contract, estimated to be valued at US$13-15 billion, could be announced as early as this month. CNOOC's acquisition target has not been identified, but analysts say it is certain to buy into a field which will be operated by China's LNG supplier.

The acquisition would be CNOOC's second overseas foray since it bought the Indonesian assets of Repsol-YPF earlier this year for US$585 million. "It will be made public immediately following announcement of the bidding result," according to sources. Three foreign firms or groups are in the running for the LNG supply contract - BP, Australia LNG Pty Ltd and Ras Laffan Co. The deal will cover a span of 20-25 years.

CNOOC has already signed preliminary agreements with all three bidders on potential acquisition terms, paving the way for a quick announcement once the LNG deal is clinched, the source said.