China National Offshore Oil Corporation or CNOOC (CEO) is China’s largest offshore energy producer and has a virtual vise-grip on fields off of China’s coast. Although, lately the company has spent more time focusing its efforts in Canadian onshore projects to fuel China’s oil addiction.
That includes this year’s huge $15.1 billion purchase of Canadian oil sands producer Nexen. That buyout was a great deal for CNOOC as oil production rose 17.8% in the third quarter — mostly due to the contribution of Nexen’s assets. That’s great news for CEO, as the company has struggled in recent years to boost its own production.
But rising crude oil production isn’t the only reason the deal will be a winner.
CNOOC recently won a big and exclusive agreement with the government of British Columbia to move forward on a new liquefied natural gas export facility off the coast of Canada. Nexen owned 60% of the proposed venture and fields that will feed the plant.
As CNOOC is quickly becoming more of a diversified energy play, investors could be handsomely rewarded. CEO shares trade for a forward P/E of just 8.