Fitch Ratings on Thursday upgraded CNOOC Ltd's Long-term Foreign Currency Issuer Default Rating ("IDR") to 'A' from 'BBB+' and its Short-term rating to 'F1' from 'F2'.

The agency also upgraded the senior unsecured foreign currency ratings of its outstanding bond issues to 'A' from 'BBB+'. At the same time, the agency assigned a Long-term Local Currency IDR of 'A', and Short-term rating of 'F1' to CNOOC Ltd. The Outlook on all the ratings is Stable.

Fitch says the rating upgrade reflects CNOOC Ltd's continuing strong operating and financial performance as well as its conservative credit metrics, which is more consistent with issuers in the 'A' rating category.

"The sustainable energy demand growth in China arising from continuing robust economic progress and persistent high oil prices will allow CNOOC Ltd to maintain its consistently strong track record," said Chee-Leong Lee, Director in Fitch's Asia-Pacific energy and utilities team.

However, Fitch remains concerned about CNOOC Ltd's continuing acquisitiveness, as overseas acquisitions continue to play a major role in its growth strategy.CNOOC Ltd now has energy stakes in countries such as Nigeria, Indonesia, Australia, Myanmar, Canada and Morocco.

Although oil prices have recently surpassed USD70/barrel on continuing strong global demand and geopolitical concerns in Iran, Iraq and Nigeria, the potential for future oil price reductions to affect CNOOC Ltd's margins and cash flows cannot be entirely dismissed, especially if global refining capacity constraints ease on increased investments.

However, this business concern is mitigated by CNOOC Ltd's strong financial profile.

By People's Daily Online