CNOOC Limited, the largest offshore drilling company in China^[1], is majority-owned by China National Offshore Oil Corporation. The company is a member of the country's government-controlled oil oligopoly along with PetroChina (owned by China National Petroleum Corporation - CNPC) and Sinopec (officially, China Petroleum and Chemical Corporation). CNOOC receives, at no cost, a 51% stake in ANY offshore project in which a foreign oil company is involved - a big advantage over its competitors, who do not have this right.^[2]This means that CNOOC can let foreigners shoulder the exploration costs and reap the production benefits. Since the record high's seen in the summer of 2008 oil prices since fell to $40 a barrel in the depths of the credit crisis before rebounding to their current levels in the $70-80 range.

CNOOC's future is intimately tied to China's future. Demand for oil in the emerging economy is colossal, at 9.0 million barrels per day, and the country produces less than half that.^[3] Furthermore, the government is promoting a shift away from the dirty coal that powers most of their electrical generators to cleaner natural gas. In both cases, CNOOC stands to benefit: its parent's expansion of refining capacity means it has a larger market to expand production, while its investment in Liquefied Natural Gas infrastructure means it will not only be able to produce the stuff, but transport it around the country as well. The growth of the Chinese economy, however, is a double-edged sword. CNOOC sells its oil to its parent in Yuan, and oil is pegged to the dollar. The Yuan has appreciated against the dollar since the Chinese government let it float with a small range in 2005, since then the Chinese government has once again pegged the yuan to the dollar. This is a small price, however, given that the company has the favor of the Chinese government and the right to take shares in offshore Chinese projects started by Western oil companies. By 2015, CNOOC plans to reach cude oil refining capacity of 51.5 million tons a year, more than double its production level in 2009.

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