China National Offshore Oil Corp (CNOOC) is planning to exit its operations from Canada, UK, and US over concerns of possible sanctions on its assets.
The state-owned oil and gas producer is looking at divesting “marginal and hard to manage” assets in the three countries, reported Reuters.
Relations between China and the Western nations have been tensed over trade and human rights issues.
The tension has increased further after Russia’s military incursion of Ukraine, for which Beijing refused to condemn Moscow.
The offshore oil and gas producer entered these countries in 2013 through a $15bn acquisition of Nexen, a Canada-based oil and gas firm.
In March, an industry source was quoted by the news agency as saying that the company’s management found it ‘uncomfortable’ in managing these assets due to high costs.
These assets include stakes in major fields in the Gulf of Mexico, North Sea, and Canadian oil sand projects.
These assets produced 220,000 barrels of oil equivalent per day (boed) in 2021, as per Reuters calculations.
The source added: “Assets like Gulf of Mexico deepwater are technologically challenging and CNOOC really needed to work with partners to learn, but company executives were not even allowed to visit the U.S. offices. It had been a pain all along these years and the Trump administration’s blacklisting of CNOOC made it worse.”
In its prospectus before the IPO, CNOOC said it may face sanctions.
CNOOC said: “We cannot predict if the company or its affiliates and partners will be affected by US sanctions in future, if policies change.”
The firm’s US assets are located in onshore Eagle Ford and Rockies shale basins.
It holds stakes in Appomattox and Stampede offshore fields in the Gulf of Mexico.
CNOOC is also weighing to acquire assets in Africa and Latin America while focusing on the development of new prospects in countries such as Uganda, Guyana and Brazil.
In March, CNOOC hired Bank of America to prepare for the sale of its assets in North Sea.
These assets are estimated to be around $3bn.
