The Australian: Chinese whispers wrong on Woodside: “CHINA'S third-ranked oil company, the government-owned CNOOC, was not interested in making a takeover offer for Woodside Petroleum, it has told the West Australian Government.”: Tuesday August 16, 2005
Nigel Wilson, Energy writer
CHINA'S third-ranked oil company, the government-owned CNOOC, was not interested in making a takeover offer for Woodside Petroleum, it has told the West Australian Government.
The company's CEO, Fu Chengyu, dismissed the suggestion at a meeting in Beijing last week with Western Australia's State Development Minister, Alan Carpenter.
The English-speaking Mr Fu opened the discussion with the senior minister by openly addressing speculation that has helped drive Woodside's shares hit record highs in recent weeks.
The meeting took place shortly after the China National Offshore Oil Company withdrew from its controversial bid for the US group Unocal, leaving the way open for a lower bid from Chevron to succeed.
Mr Carpenter said yesterday Mr Fu had been adamant his company was not interested in a Woodside equity stake.
"He addressed the question at the beginning of our meeting, making it clear CNOOC was not behind the speculation," Mr Carpenter said.
Mr Fu's reported remarks contradict reports emanating from Hong Kong, where CNOOC has its head office, suggesting it is contemplating a takeover for the Australian oil company.
Woodside, which has refused to comment on the speculation, has been fielding phone calls from Chinese media outlets, based in Hong Kong, claiming the takeover is a done deal.
The speculation of an offer emerged last year when Shell and CNOOC joined forces in the biggest single foreign investment project in China -- a 2.3 million-tonnes-a-year petrochemical plant in Huizhou worth $US4.3 billion.
This led stock market analysts to look at other areas the groups might become involved in.
Shell has indicated it is keen to dispose of some of its assets, to overcome the difficulties caused by the downgrade in its oil and gas reserves forced last year by the US Securities and Exchange Commission.
Its 34 per cent Woodside stake floated to the surface for a possible offload.
Until now, Chinese corporations have taken stakes in Australian resource projects as a partner, rather than as an owner or an equity participant.
Mr Carpenter said CNOOC's top man appeared very much more concerned about the difficulties of securing Australian LNG supplies to help meet China's demand for electricity.
Australian LNG project participants have claimed for some time that potential Chinese customers are being unrealistic concerning supply prices.
This is understood to be one of the reasons why CNOOC withdrew in April from negotiations with Chevron's Gorgon project.
Sources said yesterday that at current international oil prices of $US60 to $US70 a barrel, the wholesale price of gas into China was about double the regulated sales price allowed by Beijing to Chinese distributors.
Chinese officials have previously also expressed concern about intense Australian marketing efforts to supply the US West Coast. Preparations are well advanced for Western Australia to open a trade office in Los Angeles in support of efforts by companies such as BHP Billiton, Woodside and the Gorgon partners to sell LNG into the US West Coast.
Mr Carpenter spent 10 days in China visiting new facilities and discussing Australia's potential to supply LNG to the 10 receival terminals that Beijing has so far approved for construction. He said he had invited PetroChina to join CNOOC and Sinopec in establishing an outpost in Perth.
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