China’s CNOOC Looking to Exit Western Markets Amid Sanctions Risk

China’s state-owned oil and gas major CNOOC has ramped up efforts to sell its interests in U.S. oilfields, as the company has been looking to exit from Western markets amid sanctions fear and calls for domestic investment. The company has been scrambling to withdraw its operations from Britain, Canada and the United States since earlier this year as concerns grow over its assets could become targeted by Western sanctions due to China’s refusal to condemn Russia’s invasion of Ukraine. Beijing has also been stepping up efforts to boost energy security and requires CNOOC and other fossil fuel majors to ramp up domestic production.

CNOOC has started working on a potential exit from its interests in U.S. shale gas assets, which could raise around $2 billion. However, the company keeps its options open and could retain those assets if it does not receive suitable offers.

In the U.S., CNOOC owns interests in the onshore Eagle Ford and Rockies shale basins as well as stakes in two large offshore fields in the Gulf of Mexico: Appomattox and Stampede.

It has been in talks with British oil and gas producer Harbour Energy for the sale of the Gulf of Mexico assets.

In Eagle Ford, CNOOC’s stake is in oil and gas assets owned by U.S. shale driller Chesapeake Energy. While Chesapeake has itself put those assets up for sale, any decision there is not expected to affect CNOOC’s plans.

The Chinese fossil fuel major has reported last month a near double third quarter profits from a year earlier, thanks to soaring oil prices. The company had bought most of its Western assets via its acquisition of Canada’s Nexen, a deal that transformed it into a global player.

CNOOC has also been looking for buyers for its British North Sea assets. Norway’s Equinor has come out as a potential customer in a deal valued between $2 billion-$3 billion.

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