The chairman of CNOOC, China's largest offshore oil producer by production, said he expected the domestic price of natural gas to rise further on robust demand, giving the company more room to make higher offers in acquiring overseas gas assets in the future.

Analysts said China, which has been hunting upstream assets overseas since it became a net crude importer in 1993, is moving towards narrowing the natural gas price difference against the international prices. It makes China more competitive in bidding overseas gas assets with other energy-hungry countries with deep pockets such as India and Japan.
Fu Chengyu, chairman of CNOOC, said after the shareholders' meeting: "As the affordability of domestic users increases, which means we can offer higher prices to buy assets overseas. It's very positive to our company."
China raised domestic factory prices of natural gas, which is still under the government's control, by an average of five per cent to 15 per cent on December 26, the largest adjustment since 1997. The increase is aimed at making up for high production costs of oil companies, and providing incentive for upstream investment.
"As China's economy is growing rapidly, our demand for energy is growing as well, which means the prices of natural gas will also be adjusted accordingly," Fu said.
The government also said China's long-term goal is to form a complete market-oriented price mechanism of natural gas.
In late November, Chevron (CVX) scrapped a tentative A$30 billion agreement with CNOOC's unlisted parent, China National Offshore Oil Corp, for CNOOC to become a foundation customer in the Australian Gorgon gas project. Chevron said the price the Chinese were willing to pay was too low.
China remains concerned over an increasing shortage of natural gas in the next five years.