CNOOC eyes foreign takeover targets
Feb-28-2011 By : agxadmin
Offshore oil producer China National Offshore Oil Corporation (CNOOC) will “definitely” buy more overseas unconventional oil and gas projects after the recent Chesapeake deals, General Manager Fu Chengyu said, but he declined to name a potential takeover target or region. CNOOC Ltd, a listed arm of CNOOC, struck its second shale gas deal with Chesapeake Energy on January 30 to buy a 33.3% stake in the U.S. natural gas producer’s leasehold acres in northeast Colorado and southeast Wyoming for USD570 million, following a deal in October to buy a 33.3% interest in Chesapeake’s Eagle Ford Shale project in South Texas for USD1.1 billion. Fu said CNOOC will earmark some CNY300 billion or a third of planned investments in the five years through 2015, on offshore oil and gas projects. A lack of deepwater know-how and equipment has prevented CNOOC’s ambition to quickly expand its oil and gas exploration and development in the South China Sea. But Fu confirmed that CNOOC’s first deepwater drilling rig, Offshore Oil 981, will be employed in the South China Sea in the second half and drill one to two wells this year. The company targeted pumping 50 million tons of oil equivalent from overseas by 2020, and generating 50 million tons of oil equivalent from deepwater sources, and building a liquefied natural gas-receiving capacity of 50 million tons of oil equivalent in China’s coastal areas, the South China Morning Post reports.
Property developers looking for funds abroad
By : agxadmin
China’s major property developers have been stepping up their efforts to raise funds overseas in response to a gradually tightened cash flow, as the government’s tightening real estate measures are expected to lead to a big drop in transactions. According to a report by Royal Bank of Scotland (RBS), Chinese property developers’ off-shore debt financing this year has totaled CNY28 billion, accounting for 40% of last year’s total value. Evergrande Real Estate Group sold CNY9.25 billion of synthetic offshore renminbi bonds in mid-January, while Hopson is pricing its USD300 million bond with a 11.75% yield. Country Garden Holdings announced on February 7 a proposed issuance of senior notes with a seven year maturity to fund existing and new property projects. Credit rating company Standard & Poor’s warned that the surge in bond sales has weakened Chinese developers’ profiles. The country’s leading property developers recorded robust sales in January, but the government’s latest round of tightening measures in late January are expected to result in plummeting sales later. Shenzhen-based Vanke saw its revenue rise 221% in January from a year earlier, making it the nation’s first residential property developer with monthly sales in excess of CNY20 billion. According to Wang Gehong, President of Beijing Grand China Real Estate Fund, the cash flow of many smaller property developers has greatly deteriorated in the past few months.
Best Buy closes all its own-branded stores
By : agxadmin
Best Buy, the world’s largest consumer electronics retailer, closed all nine of its own-branded stores in China. In the past five years, Best Buy had also paid USD180 million to acquire the Jiangsu-based Five Star Appliance store chain in 2008 to expand its reach in the country. By the end of 2010, Best Buy operated some 170 stores in China under the two brand names. Some analysts said that Best Buy’s model does not work well in China because it is unable to meet the demands of local consumers, who still prefer to purchase discounted goods. Best Buy-branded stores were hit by price competition from local rivals such as Gome and Sunning which offer lower prices, although Best Buy offers better service. The company plans to open up to 50 branches of its Five Star Appliance chain by February next year, as part of efforts to “refocus on the profitable retail platform”. The company announced the appointment of Five Star co-founder Wang Jian as global Vice President of Best Buy and Chief Executive of Five Star. “The biggest mistake that Best Buy made in China was its slow pace of expansion,” said Zuo Yingjie, Chief Executive of All3c.com, the country’s largest consumer appliance shopping portal. Two stores in Shanghai reopened temporarily to handle complaints, refunds, after-sales and insurance.
Second Media Markt opens in Shanghai
By : agxadmin
German retailer Metro opened its second consumer electrical appliance outlet in Shanghai’s Pudong New Area to tap the fast growing appliance market. “We are positive about the Chinese appliance market which is growing at the rate of 25% annually,” Ton Wortel, CEO of Media Markt China, said. The first Media Markt was opened in Shanghai last November after Metro and its Media-Saturn division set up a USD200 million joint venture with Taiwan’s Foxconn Technology Group. Another 10 Media Markts are due to open in Shanghai over the next two years, followed by more than 100 outlets nationwide from 2013 to 2015, the company said. Competitor Suning Appliance Co expects to add 370 stores nationwide this year to its existing 1,300. Gome Electrical Appliances Holdings said it will open over 400 stores this year to add to the 1,400 it has now.
China 21st most innovative nation
By : agxadmin
China ranked 21st in terms of innovative abilities among the world’s 40 most innovative countries, according to a report issued by the Chinese Academy of Science and Technology for Development (CASTED). China’s innovative ability garnered 57.9 points based on a scale of 100 with the United States getting 100 points at the top. The report, China’s first on national innovation ability, was mainly based on data from the World Bank, the National Science Foundation (NSF) of the United States and China’s National Bureau of Statistics (NBS). According to the report, China ranked first in terms of the number of research personnel and the export of high-tech products. It ranked fourth in total research and development (R&D) investment and third in terms of the number of authorized patents. China is expected to become an innovative country by 2020, a time when scientific progress is predicted to contribute 60% of the nation’s economic development and R&D investment would jump to 2.5% of GDP. The United States ranks first in the report, followed by Switzerland, the Republic of Korea and Japan.
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