Cnooc Renounces Settling $1 Billion of Bonds in Cash

Cnooc Ltd., the nation's biggest offshore oil producer, gave up its right to settle $1 billion of convertible bonds in cash.

The company has $985.7 million of the zero-coupon bonds due in 2009 outstanding, Cnooc said in a statement to the Hong Kong stock exchange yesterday. The bonds can be converted to shares at HK$5.79 apiece, it said.

Under Hong Kong accounting rules, the cash settlement option meant the bonds were treated as a liability that was carried at fair value and included in Cnooc's earnings statement, the announcement said.

Cnooc's shares have more than doubled since the company issued the bonds on Dec. 15, 2004, in part because economic growth and increased car ownership in China have meant greater demand for petroleum products. The stock rose 3.2 percent to HK$9.38 in Hong Kong yesterday.