China’s oil champion CNOOC prepares retreat from Canada, U.S., U.K. over sanctions fear

CNOOC is seeking to sell "marginal and hard to manage" assets in Britain, Canada and the United States, a senior industry source told Reuters.

China’s top offshore oil and gas producer CNOOC Ltd. is preparing to exit its operations in Britain, Canada and the United States, because of concerns in Beijing the assets could become subject to Western sanctions, industry sources said.

Ties between China and the West have long been strained by trade and human rights issues and the tension has grown following Russia’s invasion of Ukraine, which China has refused to condemn.

The United States said last week China could face consequences if it helped Russia to evade Western sanctions that have included financial measures that restrict Russia’s access to foreign currency and make it complicated to process international payments.

CNOOC did not immediately comment.

Companies periodically carry out reviews of their portfolios, but the exit being prepared would take place less than a decade after state-owned CNOOC entered the three countries via a US$15 billion acquisition of Canada’s Nexen, a deal that transformed the Chinese champion into a leading global producer.

The assets, which include stakes in major fields in the North Sea, the Gulf of Mexico and large Canadian oil sand projects, produce around 220,000 barrels of oil equivalent per day (boed), Reuters calculations found.

Last month, Reuters reported CNOOC had hired Bank of America to prepare for the sale of its North Sea assets, which include a stake in one of the basin’s largest fields.

CNOOC has launched a global portfolio review ahead of its planned public listing in the Shanghai stock exchange later this month that is aimed primarily at tapping alternative funding following the delisting of its U.S. shares last October, the sources said.