HONG KONG (Dow Jones)--China's largest offshore oil producer by output, CNOOC Ltd. (CEO), disclosed a share placement Thursday expected to raise nearly US$2 billion, which analysts say might be used to buy foreign energy assets.

CNOOC suspended its shares from trading before the Hong Kong market opened, then said it would carry out a "top-up placing."

A person familiar with the deal told Dow Jones Newswires the cash would be used for "general capital purposes," but no details were immediately available.

A term sheet seen by Dow Jones Newswires indicated the oil company would sell between US$1.95 billion and US$1.98 billion of mostly new stock.

The timing of the sale appeared to be good for CNOOC, with oil prices and its own share price near record highs amid a global oil boom that has been explained in large measure by China's rising energy demands.

Analysts said CNOOC is cash rich, and the placement news raised speculation it planned on buying more energy assets.

One suggested the company might be building a war chest with an eye on a specific oil or gas deal in the Middle East, Africa, or Australia.

"Most of these deals you have to be able to strike quickly," the analyst said, adding that extra cash on hand would make CNOOC "more nimble, more flexible."

CNOOC has spent some US$3.7 billion on overseas oil deals, including a US$2.7 million acquisition - which it said last week had been finalized - that gives it 45% of an offshore license in Nigeria.

In the share placement, CNOOC is selling 2.5 billion shares at HK$6.05-HK$6.15 each, the term sheet showed. It said 90.9% of the 2.5 billion shares are new shares and the rest are old shares.

The price range represents a discount of 5.4%-6.9% to the stock's closing price of HK$6.50 in Hong Kong Wednesday.

CNOOC is selling shares at a time when oil prices have been in record territory above US$70 a barrel. The company's Hong Kong-listed shares closed at a record HK$6.85 on April 20, having hit that level intraday April 19.

JP Morgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Credit Suisse Group (CSR) are the deal's bookrunners, the term sheet said.