CNOOC could face Woodside hurdles
August 4, 2005 - 5:10PM
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Chinese oil giant CNOOC withdrew its $US18.5 billion ($A24.01 billion) bid for US energy company Unocal because of intense political opposition and it could face similar hurdles if it made a bid for Australia's Woodside Petroleum.
CNOOC's bid for Unocal offered a $US1 billion ($A1.3 billion) premium to the competing bid from Chevron, but it abandoned the bid after experiencing unprecedented opposition.
The move has left CNOOC cashed up, looking for new takeover targets and speculation has mounted that the Chinese company could consider a bid for an Australian energy company.
Commonwealth Securities resources analyst Len Eldridge said CNOOC would face the same political hurdles as it had in the US from Australia's Foreign Investment Review Board if it considered a bid for Woodside.
"They won't make a bid and they won't be allowed to make a bid," he said.
"Woodside is definitely an attractive target and if they were allowed to I am sure they definitely would bid but after the US I can't see that happening."
Shell made a play for Woodside in 2001 with Treasurer Peter Costello blocking the bid on national interest grounds.
Woodside is a key player in the massive North West Shelf project along with BP and BHP Billiton, and it is most likely considered a strategic asset by the Australian government, said Mr Eldridge.
Shell is also a major shareholder of Woodside with a 34 per cent stake, which could be another stumbling block for a CNOOC bid, he said.
"I think it is much more likely CNOOC would look to take part in future projects such as Pluto or Browse as opposed to actually buying Woodside."
Another analyst, who did not want to be named, agreed that a bid for Woodside was a long shot.
Mr Eldridge also ruled Santos out of the equation saying it only had Australian assets.
If CNOOC was interested in Woodside's African assets another possible acquisition could be Hardman Resources, which has operations in Mauritania, said one analyst.
Shares in Woodside and Hardman were both down on Thursday because of a military coup in Mauritania.
Woodside said its staff and contractors were all safe and its operations had not been affected.
Woodside shares fell 22 cents to $30.28, Hardman lost 13 cents to $2.36 and Sphere dropped eight cents to 60 cents.
HDR
hardman resources limited
