China Oil and Gas Group to withdraw from the US, UK and Canada?

Reuters reported, Hai Duong Oil and Gas Corporation China (CNOOC) is said to be preparing to withdraw from the US, UK and Canada due to concerns about rising sanctions, regulations and costs.

Relations between China and Western countries have deteriorated over the past few years. The relationship between China and the US fell to a low after former President Donald Trump launched a large-scale trade war, hitting a series of Chinese goods with import duties. Tensions increased recently after China refused to criticize Russian military campaign in Ukraine.

CNOOC, China’s top offshore oil and gas producer, is now looking to exit the West by selling “marginal and hard-to-manage assets” in these three countries, according to sources cited by Reuters.

Sources told Reuters that CNOOC’s top management finds it difficult to manage its assets in the West because of regulations and high operating costs.

CNOOC operates in these three countries with its $15 billion acquisition of Canadian energy giant Nexen in 2013. CNOOC was delisted from the New York Stock Exchange (NYSE) after it was delisted. Former President Donald Trump launched Trade war with China.

Before that, CNOOC was listed on the NYSE for two decades. The administration of President Joe Biden removed the Chinese oil company from the blacklist about a year ago.

In the United States, CNOOC owns offshore assets in the Eagle Ford and Niobrara shale basins, and has offshore stakes in the Stampede and Appomattox fields in the Gulf of Mexico. In the UK, the group operates three sites in northeastern Scotland, and has oil sands and shale oil and gas assets in Canada.

A senior industry source said: “Operations like those in deep waters in the Gulf of Mexico are technologically challenging and CNOOC really needs to work with partners to learn, but executives company isn’t even allowed to go to the US offices.”

This has been a stumbling block over the years, he explained, and the Trump administration’s blacklisting of CNOOC makes things worse.

Furthermore, according to sources, the commands punish Russia The latest in the US could affect CNOOC’s assets. The group, which is set to list on the Shanghai stock exchange in April, is said to have plans to buy assets in Latin America and Africa.

CNOOC is reported to have produced about 1.57 million barrels of oil per day in 2021, of which 62,000 are from locations in Canada and 80,000 barrels from other locations in North America. In total, CNOOC produced nearly 220,000 barrels oil every day in the US, UK and Canada, according to Reuters calculations.