Chinese oil major CNOOC is still debating internally how far to push into offshore wind after a market entry that was primarily designed to help an ailing subsidiary tap into new revenue streams, Recharge has learned.

CNOOC – China’s third-largest oil and gas group – sparked interest well beyond its home market when it confirmed it would look at opportunities in offshore wind, leveraging its experience in exploration and production along the 32,000km Chinese coastline and around the world.

The company’s CEO Yuan Guangyu said its first foray involves a development off China’s Jiangsu province, without giving further details, but which Recharge understands takes the form of an investment in a project underway by private developer Jiangsu Jiusi Corp.

A source in CNOOC familiar with the group’s strategy said its initial plan is to test the water by chipping into a greenfield project, with no immediate intention of getting involved in wind farm operation.

The source said at group level, the company has yet to “properly study the strategy to participate in the offshore wind market.

“We indeed have in-depth experience of offshore engineering, but it is a different skill to build and operate power plants. It is still a question which role CNOOC should pursue in the market.”

As the first Chinese fossil giant to show an interest in offshore wind, CNOOC’s announcement created a stir in its domestic energy market as commentators predicted it could follow – or even partner with – Western majors such as Shell and Equinor in their journey into renewables.

But the source revealed the company’s own motives were shorter term, and came at the suggestion of China Offshore Oil Donghai Corp., a Shanghai-based subsidiary which is under pressure over its poor financial performance and eager to seek a new value stream. The unit is now leading CNOOC's offshore wind efforts, a separate source confirmed.

Global developers mull Chinese offshore wind role: but how?

Hydrocarbon reserves in the Donghai region are falling, but offshore wind is finding favour with provinces and cities along the Chinese coast. Shanghai, for example, is planning to become the first to demonstrate floating wind technology, Recharge’s source at CNOOC group level revealed.

Last September, the head of the Shanghai subsidiary paid a visit to Shanghai Lingang Offshore Wind Farm, a project developed by Shenergy Group – a Shanghai government-run energy firm and CNOOC’s long-term partner in the LNG sector.

Few doubt the potential of CNOOC to make an impact in the offshore wind sector if it does decide to fully embrace it.

The offshore oil major’s move to renewables “is consistent with China's broader strategy of reducing carbon emissions and investing into new technologies,”energy consultancy Wood Mackenzie said after the company revealed its intentions.

CNOOC’s move “could be the first foray for (the Chinese firm) to become a more integrated energy company,” Wood Mackenzie added. But it also believes “such moves would be limited in near term”.

Back to the future for CNOOC