The headquarters of CNOOC in Beijing. The company plans to invest between 800 billion yuan and 1 trillion yuan during the 12th Five-Year Plan (2011-2015). [Photo / Bloomberg]

State-owned firm now owns oil and gas reserves of 5.67 billion tons

BEIJING - For Fu Chengyu, the helmsman of China's largest offshore oil conglomerate, it's never been an easy job to steer the vessel in rough seas.

And now, Fu, chief executive officer of China National Offshore Oil Corp (CNOOC), has seen his company take a giant stride forward after it realized more than 50 million tons of oil equivalent in domestic oil and gas production in 2010.

"It shows that China has become one of the world's largest players in the offshore oil market in terms of technology, management and operational skills. It provides strong support when we sail abroad," Fu said on Sunday.

Indeed, as the driving force behind the offshore oil giant with a total profit of 90 billion yuan ($13.6 billion), Fu has actively propelled the State-owned enterprise's (SOE) international cooperation, and participated in most of the joint-venture projects with the big names in the industry, including Amoco, Chevron, ConocoPhillips, and Shell.

"Apart from capital and technologies, our distinct competitive edge lies in our commitment to provide benefits for the local community when exploring overseas," said Fu.

The CNOOC chief, who received his master's degree in petroleum engineering from the University of Southern California in the United States, is a dedicated market-oriented entrepreneur with an unwavering desire to make his company a "world-class international energy company".

Fu has good reason to be proud of his company, which in its 29 years of existence has surpassed some of the world's leading energy firms in terms of market value.

"We can sit in an equal position when discussing cooperation with our foreign peers, something that was hard to imagine a decade earlier," said Fu, who has been with CNOOC since the company was established in 1982.

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In 2010, CNOOC's market capitalization exceeded more than 980 billion yuan.

Currently, the company owns oil and gas reserves of 5.67 billion tons globally, and has developed 83 oil and gas fields in China. Analysts estimate that during the past 10 years, 53 percent of the country's new oil production came from its offshore operations. In 2010, the proportion rose to approximately 80 percent.

CNOOC now has a controlling stake in five listed firms including CNOOC Ltd, listed in Hong Kong and New York, Hong Kong-listed China BlueChemical Ltd, and the Shanghai-listed Offshore Oil Engineering Co Ltd.

"We hope to maximize CNOOC's value as a group by letting our subsidiaries go public," Fu said.

However, reversing the major trend of large SOE's, which tend to list as a group, Fu stressed that the parent company has no intention of listing as a single entity to avoid a developmental imbalance in its different sectors.

"We hope to build up an industry chain, rather than emphasizing some of our key areas such as oil exploration and development," Fu said, adding that long-term return for shareholders is one of the key focuses for CNOOC's listed companies.

He said earlier this month that the company plans to invest between 800 billion yuan and 1 trillion yuan during the 12th Five-Year Plan (2011-2015), with the majority of the capital coming from the equities market.