China National Offshore Oil Corp. (CNOOC), the country's largest offshore oil producer, may lose part of its stake in a natural gas field in Indonesia if a lawsuit filed by its partner succeeds.
CNOOC Muturi Limited, a wholly owned subsidiary of CNOOC, currently holds a 16.96 percent share in Indonesia's Tangguh liquefied natural gas (LNG) project, which is valued at about US$5 billion.
The offshore oil giant disclosed the law suit in its 2006 annual report saying a partner in the LNG project is likely to take legal action against the company and its subsidiaries, requesting they share part of the interests under the joint operating agreement.
The LNG project is expected to begin operations this year and CNOOC's share of the gas reserves are to supply the terminal in southeast China's Fujian Province.
The case is scheduled for hearing in November.
The result of the lawsuit is difficult to predict as are the expenses CNOOC is likely to incur, reported Wednesday's Shanghai Securities News, citing CNOOC sources.
(Xinhua News Agency May 17, 2007)