CNOOC, the Chinese oil and gas company, wants to sell its interests in the U.S. oil fields.
Fear of sanctions
CNOOC’s decision comes in the context of economic uncertainty. China is indeed afraid of strong Western sanctions following its position on Russia. The Chinese government has refused for several months to condemn the invasion of Ukraine by Russia.
Thus, the United States has warned China that the consequences would be heavy if it buys Russian oil under sanctions. China also seems to continue to have a strong relationship with the Russians. The stakes are high because Russia has hydrocarbons and raw materials to secure Chinese supplies.
CNOOC has a strong presence in the Americas, with interests in the Eagle Ford and Rockies shale onshore basins. These assets are owned by U.S. shale drilling company Chesapeake Energy Corp. The U.S. company itself has put its assets up for sale, but this should not affect CNOOC’s plans.
Different options
The oil and gas giant has interests in the Gulf of Mexico: Appomattox and Stampede. China was in negotiations with the British producer Harbour Energy. The country is thus seeking an agreement to withdraw from the Gulf of Mexico and sell its assets.
CNOOC has benefited greatly from thesurge in oil prices. As a result, its third-quarter profit reportedly doubled last month. Its position as China’s largest producer is the result of the $15 billion acquisition of Canadian Nexen.
Finally, the Chinese company is looking for a buyer in the British North Sea. To date, the Norwegian company Equinor seems to be the most likely candidate to win. It would consider buying these holdings in a transaction valued between $2 and $3 billion.
