CHINA National Offshore Oil Corp, the nation's third-largest oil company, may sell shares in a unit that provides support services in the first half of this year to finance expansion.

China National Offshore plans to sell shares in CNOOC Oil Base Group, a technical and personnel services unit, company President Fu Chengyu said yesterday in an interview with Bloomberg News in the southern province of Hainan. "We are trying to list the unit in China in the first half," he said.

State-owned companies in China are selling stakes to fund expansion in the world's fastest-growing major economy, which grew 11.9 percent last year. China National Offshore units CNOOC Ltd and China BlueChemical Ltd are listed in Hong Kong. China Oilfield Services Ltd trade in Hong Kong and Shanghai.

"It's good for the company," said Kenny Tang, director of Tung Tai Securities Ltd in Hong Kong, who has a "buy" recommendation on the stock. "The value of the company can be enhanced by spinning off the services unit."

CNOON Oil Base accounts for eight percent of China National Offshore's total assets and has annual sales of more than 10 billion yuan (US$1.4 billion), Liu Junshang, spokesman of the Beijing-based company, said in October. The unit, established in December 2004 with a registered capital of 3.78 billion yuan, provides technical, equipment, human resources and logistics services.

"The second half may be better" for the offering, Tang said. "It depends on the stability of global financial markets."

CNOON Oil Base made a profit of 1.16 billion yuan on sales of 11.13 billion yuan in 2006, Xinhua Finance reported on April 2.

Shares of China Oilfield have soared more than sevenfold since listing in November 2002, compared with a 147 percent return in the benchmark Hang Seng index. China BlueChemical has gained more than 80 percent after listing in September 2006 compared with a 40 percent return in the benchmark index.