Deloitte assists listing of CNOOC on SSE Main Board
Largest IPO in energy industry since expansion of pilot program for domestic listings of red chip enterprises
Deloitte China supported the successful listing of CNOOC Limited ("CNOOC", stock codes: 600938.SH, 00883.HK) on the Main Board of Shanghai Stock Exchange ("SSE") on 21 April 2022.
This is the largest IPO in the energy industry since the expansion of the scope of the pilot program for domestic listings of red chip enterprises. It is also the 2nd largest IPO in the A-share market so far in 2022 by funds raised. CNOOC’s listing exemplifies the transformation and development of the energy industry, reform and innovation of state-owned enterprises, and the reshaping of the capital market against the backdrop of China’s peak carbon and carbon neutrality goals. CNOOC is one of China's three oil giants. Its return listing shows the results of reform of the A-share capital market and the attractiveness of domestic capital, laying a foundation for return listings of more mega corporations in future.
In this A-share offering, CNOOC offered 2.6 billion shares raising about RMB28.080 billion. Assuming the full exercise of its over-allotment option, the IPO could offer as many as 2.99 billion shares raising up to RMB32.292 billion.
About the IPO Engagement
As reporting accountant for CNOOC's A-share IPO, Deloitte China successfully completed compliance review, cross-border audit, regulatory reporting and listing application work by coordinating its strong global resources across multiple service lines and using advanced professional skills, extensive practical experience in the industry and capital market, smooth communication with regulatory authorities, and a swift feedback mechanism. Deloitte’s work won high recognition and acclaim from the client, their sponsor, lawyer, and other intermediaries.
The listing process took less than five months from CNOOC announcing the commencement of its A-share offering work on 26 September 2021 to the company receiving approval from the Public Offering Review Committee of the China Securities Regulatory Commission ("CSRC") on 24 February 2022. During this period, Deloitte completed several rounds of additional audits and reviews efficiently against a challenging schedule, using its extensive experience in the energy industry and capital market.
CNOOC has operations and assets in more than 20 countries and regions across six continents. As the world's largest professional services firm, Deloitte China coordinated seamlessly with fellow member firms in Canada, Singapore, Nigeria, and elsewhere to complete the cross-border audit work.
During the CSRC’s review of CNOOC’s listing application, Deloitte coordinated diligently with each intermediary to assist CNOOC in providing efficient, high-quality replies to CSRC's first round of feedback within seven business days. This ensured CNOOC’s A-share IPO work was orderly and efficient.
The completion of this engagement demonstrates Deloitte's strength in serving large clients and its undisputed leadership as the world's largest professional services firm.
Key members of our team
Audit & Assurance Engagement Team: Kevin Xu, Michael Zhang, Selina Yu, Cheng Cheng, and Taylor Lam, partners; Derby Zhao, director; Preston Xie, senior manager; Nicole Niu, Christina Lin, Bing Xia, and Alicia Zhang, managers.
EQCR Team: Celine Ma, partner; Xiuli Guo, director; and Lily Wang, senior manager.
Technical Review Team: Xiaohong Cong, partner; and Claire Zhang, senior manager.
About the client
CNOOC is principally engaged in exploring, developing, producing, and selling crude oil and natural gas. It is China's largest offshore crude oil and natural gas producer and one of the largest independent oil and gas exploration and production groups in the world.
As of end-2021, CNOOC has proven net reserves of 5.73 billion barrels of oil equivalent (BOE), net production of 570 million BOE, and total assets of RMB786.6 billion. It also owns more than 95% of the total exploration rights and fields in Chinese waters and enjoys exclusive rights to cooperate with foreign countries in the exploration, development, production, and sale of offshore oil by end of 2020. CNOOC holds interests in several world-leading oil and gas projects.
Source: Initial Public Offering of RMB Ordinary Shares (A-Shares) Prospectus of CNOOC Limited, published on SSE's website on 11 April 2022, and 2021 Annual Report published on HKEX's website on 12 April 2022.
Background and significance of the engagement
CNOOC was dual-listed on the Stock Exchange of Hong Kong and New York Stock Exchange (NYSE) in 2001. It listed on Toronto Stock Exchange in 2013. CNOOC officially announced the start work of its A-Share IPO on 26 September 2021 and its American Depository Shares of CNOOC were delisted from the NYSE in October 2021.
With CNOOC's return listing in the A-share market, all of China’ three biggest oil companies are now domestically listed, with huge implications for the development of the country's energy industry and capital market.
Deloitte China congratulates CNOOC on its listing on SSE's Main Board. We will continue to provide high quality professional services to assist more clients to take one step ahead in today's increasingly competitive and complex business environment.