China's state oil giant CNOOC said Thursday that it planned to sell bonds to institutional investors, as commentators say it has ambitious expansion plans to help meet growing domestic demand.
The firm, China's biggest offshore oil and gas producer, said it would issue 10 and 30-year bonds with the proceeds to be used for general corporate purposes, without saying how much it planned to raise.
The firm had been seeking $1.5 billion in bank loans to fund a deal to buy the 60 percent of Argentina-based Pan American Energy from BP that it did not already own, Dow Jones Newswires reported, citing unnamed sources.
The $7.06 billion Pan American deal should boost the Chinese firm's presence in South America as Beijing encourages aggressive expansion among the country's energy firms to secure future oil and gas sources.
The bond issue may be a sign of stepped-up future acquisition plans, said Gordon Kwan, the head of regional energy research at Mirae Asset Securities.
"One of our predictions for 2011 is for CNOOC to expand its footprint in a high-cost oil sands project in Canada with economics leveraged to higher oil prices ahead," he told Dow Jones.
An investor roadshow was to start in Hong Kong on Friday.
Company shares fell 0.5 percent to HK$19.24 ($2.47) early Thursday before trading was suspended pending more details about the bond issue.
The sale also comes as government-ordered credit tightening has prompted some firms to look outside China for funds, particularly in Hong Kong.
In November, the Hong Kong unit of China's state-owned energy and fertilizer company China Sinochem Group raised $2 billion from issuing global US dollar bonds.
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