China's CNOOC steps up Western retreat with launch of U.S. sale - sources

Nexen Tire

23/11/2022 17:02

By Shariq Khan and Ron Bousso
       Nov 23 (Reuters) - Chinese oil and gas major CNOOC
 0883.HK   600938.SS  has sounded out potential buyers of its
interests in U.S. oilfields, two sources said, stepping up its
retreat from Western nations amid sanctions concerns and calls
for domestic investment.
    Reuters reported in April that CNOOC was considering an exit
from its operations in Britain, Canada and the United States,
because of concerns in Beijing that those assets could become
subject to Western sanctions, owing to China's refusal to
condemn Russia's invasion of Ukraine.
    Beijing is also stepping up efforts to boost energy
security, requiring CNOOC and others to raise domestic
production and invest in new, more costly and challenging
resources to help arrest fast-depleting reserves in existing
conventional oilfields. 
    CNOOC has hired JPMorgan to advise it on a potential exit
from its interests in U.S. shale gas assets, which could raise
around $2 billion, the sources familiar with the matter said.
    The sources cautioned that a sale was not guaranteed, and
CNOOC could still retain these interests if it did not receive
suitable offers or political situations changed swiftly. They
requested anonymity as the sale plans are confidential.
    CNOOC and JPMorgan declined to comment.
    In the United States, 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.
    The Chinese major is in talks with British oil and gas
producer Harbour Energy  HBR.L  for the sale of the Gulf of
Mexico assets, two other sources familiar with the talks said.
    Harbour Energy declined to comment.
    In the Eagle Ford basin of south Texas, CNOOC's stake is in
oil and gas assets owned by U.S. shale driller Chesapeake Energy
Corp  CHK.O . While Chesapeake has itself put those assets up
for sale, any decision there is not expected to impact CNOOC's
plans, one of the sources said.
    CNOOC, which last month reported a near doubling in
third-quarter profit from a year earlier on soaring oil prices,
acquired the bulk of its U.S. and other Western holdings less
than a decade ago via the $15 billion purchase of Canada's
Nexen, a deal that transformed the Chinese champion into a
leading global producer.
    CNOOC has also been looking for a buyer of its stake in
British North Sea oilfields, Reuters reported in March. Norway's
Equinor  EQNR.OL  is said to be considering buying the stakes in
a deal valued between 20 billion and 30 billion Norwegian crowns
 ($2-3 billion).
    ($1 = 9.9614 Norwegian crowns)
 (Reporting by Shariq Khan and Ron Bousso
Additional reporting by Chen Aizhu and David French
Editing by Mark Potter)
 ((Shariq.Khan@thomsonreuters.com; Twitter: @shariqrtrs))