Chinese state-owned oil giant CNOOC Ltd., which stands for China National Offshore Oil Corporation, has followed through on an earlier announced sale of its Gulf of Mexico assets to Britain’s Ineos Energy.
“This is a major step for us into the deepwater Gulf of Mexico, which builds on our growing energy business,” said Ineos CEO David Bucknall in announcing the deal in December 2024.
Ineos Energy focuses on oil and gas exploration and production, with activities in the North Sea, UK, Denmark and the USA. Its onshore assets include production and exploration leases across 172,000 acres in South Texas. The company is also investing in LNG and Carbon Capture and Storage (CCS) systems.
Regarding its offshore assets, Ineos acquired CNOOC’s interests in Shell’s Appomattox platform and Hess’ Stampede platform for approximately USD$2 billion.
According to Maritime Executive, the deal is Ineos’ third investment in the US energy market in three years, alongside an LNG deal with Sempra and the acquisition of shale oil assets in Texas in 2023.
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But the Chinese oil company remains an important US partner abroad, holding a 25 percent stake in Exxon’s Stabroek Block development off Guyana, the publication added.
CNOOC has reportedly been seeking buyers of its interest in US oil and gas fields, along with its operations in Britain and Canada, since 2022, over concerns those assets could become subject to Western sanctions because China had not condemned Russia’s invasion of Ukraine.
The company’s withdrawal from offshore USA comes less than a decade after CNOOC entered the three countries through a USD$15 billion acquisition of Canada’s Nexen Inc.
The assets including major fields in the North Sea, the Gulf of Mexico and two Canadian oil sands projects — Long Lake and Hangingstone — in 2022 produced about 220,000 barrels of oil equivalent (boe) a day.
According to CBC News, CNOOC launched a global portfolio review ahead of its planned listing on the Shanghai Stock Exchange after it delisted its US shares in October 2021.
It is looking to acquire new assets in Latin America and Africa, and develop large prospects in Brazil, Guyana and Uganda.
A senior industry source told Reuters that CNOOC’s top management found managing the former Nexen assets “uncomfortable” due to red tape and high operating costs compared to developing nations.
In the United States, its Chinese executives required security clearances to enter the country.
“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,” said the anonymous source.
In January, CNOOC said it is keeping its capital expenditures flat this year compared to 2024 as it loweres its oil and gas production growth targets, although it still expects annual output records going forward
Oilprice reported CNOOC’s net oil and gas production was about 720 million boe in 2024 — setting a record high for the sixth consecutive year.
The net production target for this year is 760 million to 780 million boe, 20 million boe lower than the previous target.
The new production guidance for 2026 is between 780 million and 800 million boe, down from 810 million to 830 million boe, which is now the guidance for 2027.
The lowered guidance was partially due to the sale of its Gulf of Mexico assets.
By Andrew Topf for Oilprice.com
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