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Investors relieved after CNOOC drops bid
Liu Gu, a senior energy analyst with Guotai Jun'an Securities (Hong Kong) Ltd, told China Daily that CNOOC's withdrawal will lead to rising shares in the short term, but in the long run, the decision also means a chance to expand the global business has been lost. According to BOC's Lau, the Chinese oil company has actively sought possible acquisition opportunities across the globe. The failure to buy Unocal, whose Asian gas assets are very attractive to CNOOC, may push the oil giant towards other acquisition opportunities. Lau said the Chinese oil company is gearing up to secure gas sources for its extensively-developing liquefied natural gas (LNG) projects across the country. The central government has given CNOOC the go-ahead to build four LNG terminals along the country's eastern coastal areas, in Fujian, Guangdong, Zhejiang and Shanghai, according to Lau. The decision to drop the all-cash bid for Unocal has also led to rating agencies revising CNOOC's rating levels. They had previously considered downgrading the Chinese oil company amid concerns that the Unocal bid would increase its CNOOC's debt levels.
Fitch Ratings affirmed the Chinese oil producer's rating at "BBB+" with a positive outlook, the ratings company said in a statement yesterday. Moody's confirmed its "A2" rating with a stable outlook for CNOOC and its State-owned parent company, which controls 70 per cent of the Hong Kong-listed oil producer. CNOOC was placed on Rating Negative Watch by Fitch on June 24 because the ratings company was concerned a bidding war with Chevron could occur, and CNOOC might take on more debt to finance the transaction. The raised outlook was a result of "the strong fundamentals of Chinese energy demand and the acknowledgment that the company's credit metrics would be more consistent with an issuer in a higher rating category," the statement said.
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