CNOOC might try to buy Australia's Woodside Petroleum or Santos folLowing its failure to acquire US-based Unocal Corp, according to the Asian editions of Financial Times.
But Santos has a 15% shareholding limit and any attempt to buy Woodside would run into political problems in Canberra due to concerns associated with national interest.
On Tuesday CNOOC withdrew its $US18.5 billion bid for Unocal, due to intense US political opposition.
It is likely to face similar, albeit calmer, opposition in Australia if it tries to take over a major company.
An alternative – attractive both to Australia and China – could be buying stakes in individual projects.
CNOOC has been discussing possible investment in the A$11 billion Gorgon gas development, which is led by Chevron, the company that beat CNOOC to take over Unocal.
CNOOC could also take slices of other Australian petroleum projects, such as a North West Shelf sixth train or Woodside’s Browse Bsasin project, according to various analysts.
Last year, the Chinese major spent $348 million for a stake in the North West Shelf project and the NWS partners agreed to sell CNOOC A$25 billion of LNG. CNOOC is leading plans to develop LNG import terminals and distribution networks for its rapidly growing energy market.
Woodside has continued to declined to comment on speculation it could be a takeover target.
