Chinese state-controlled oil giants crashedlink in Hong Kong trading after Reutersreported on Monday that the Trump administration was poised to add China’stop offshore oil and gas producer to a sanctions list, threatening tocripple its international operations.
CNOOC slumped as much as 13.4 per cent to HK$8.18, set for the biggestone-day slump since a 17.2 per cent setback on March 9, just weeks beforeglobal oil prices slipped below zero for the first time. The oil exploreris a 64 per cent-owned flagship of China National Offshore Oil Corp.Thepotential action against CNOOC, as reported by Reuters, and other Chinesecorporations would follow a decision in August against 11 Chinese firmslinkanda designation of 20 top Chinese firms including those “owned or controlled”by the People’s Liberation Army.The escalation in sanctions is likely tomake life harder for President-elect Joe Biden in his policy on thesoured US-Chinarelationshiplink.Trump himself signed an executive order earlier this month banning USpersons from transacting in securities of “Communist Chinese militarycompanies.”
“The most damaging would be restrictions on access to US dollar financing,or equally bad, restricting work with US companies or persons,” said NeilBeveridge, a senior analyst at Sanford C. Bernstein. “This couldeffectively paralyse CNOOC’s international operations. This does not feellike a buy-on-the-dip moment.”
Beveridge cautioned that the Reuters report remained unconfirmed. “We don’tknow if this may apply to the listed unit or the parent company, and whatsort of measures the US may be seeking,” he added.
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PetroChina, the listed arm of China National Petroleum Corporation, alsodropped as much as 5.7 per cent to HK$2.48. China Petroleum & Chemical Corpor Sinopec fell as much as 5.3 per cent to HK$3.57.
Courtesy: South East China Post
