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Minority shareholders in China s top offshore oil and gas producer, CNOOC Ltd., rejected a proposal that would allow its state-owned parent to acquire overseas assets on behalf of the group, dealing a setback to the group s expansion ambitions.

Minority shareholders in China’s top offshore oil and gas producer, CNOOC Ltd., rejected a proposal that would allow its state-owned parent to acquire overseas assets on behalf of the group, dealing a setback to the group’s expansion ambitions.

Shares in CNOOC, which last year lost its $ 18.5 billion takeover bid for Unocal Corp. to Chevron in the face of stiff political opposition in the United States, fell by nearly 2 percent in early Tuesday trade before recovering to HK$ 5.25 — the same level as their previous close.

CNOOC’s proposal would have changed a non-competition agreement with the company’s unlisted parent, state-owned China National Offshore Oil Corp. (CNOOC), allowing the parent to engage in competing business in China and overseas, as long as it had the listed company’s consent.

Since CNOOC’s 2001 listing, it has focused on offshore exploration and production activity while its parent has focused on downstream projects, such as liquefied natural gas (LNG) terminals.

Under the rejected amendment, the overall group would have had more flexibility in making overseas acquisitions.

The proposal had been opposed by Hong Kong shareholder activist David Webb, who had said on his www.webb-site.com: ‘We urge investors to vote against this value-destroying proposal. Why give up something so valuable for nothing?’

CNOOC said in a statement late on Monday that it regretted the outcome of the vote.

‘Nonetheless, we still believe that the proposed amendments … if passed, would be beneficial to the Company and its shareholders as a whole,’ CNOOC said in the statement.

‘Furthermore, the Company could have the right to acquire projects from the parent company when they are beneficial to the Company. It would provide opportunities for the future development of the Company, and the interests of the Company, as well as minority shareholders, would be sufficiently protected.’

CNOOC had hoped to adopt a structure that would allow its unlisted parent to conduct riskier business.

Source : abcnews.go.com

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