According to an industry source, a fire forced the closure of operations in the 800,000 ton-per-year aromatics unit of CNOOC Ltd.’s (CEO - Free Report) Huizhou refinery.
Natural gas condensate or naptha is generally processed in an aromatics refinery to get the final product i.e. petrochemicals such as benzene and paraxylene. The facility, owned by the parent of CNOOC, is located in the southern Guangdong province. It has a crude refining capacity of 240,000 barrels per day.
As per reports, a blast in CNOOC's Huizhou refinery –– close to Daya Bay in China’s Guangdong province –– occurred at around 4.30 am. The reason for explosion is said to be a fuel leak at a pump. Residents have been evacuated from the surrounding areas and the fire is under control.
CNOOC is one of the three oil firms in China and one of the largest independent oil and gas exploration and production companies in the world. It is the only company permitted to conduct exploration and production activities with international oil and gas companies off the shores of China. CNOOC’s oil and gas properties are located in four major production areas in offshore China, namely Bohai Bay, western South China Sea, eastern South China Sea and the East China Sea.
The company’s exposure in the South China Sea is gaining momentum with its recent 24.5% stake purchase in 15/34 block, located in the Pearl River Mouth Basin. Additionally, CNOOC’s oil discovery in the Enping Trough of the South China Sea will add a considerable reserve base.
CNOOC is a Zacks #1 Rank, which is equivalent to a Strong Buy rating for a period of one to three months. We also maintain an Outperform rating on the stock for the long term. China Petroleum & Chemical Corp (SNP - Free Report) and Petroleo Brasileiro (PBR - Free Report) are major competitors of CNOOC.