Fearing sanctions, Chinese oil firm plans to pull out of Western markets4 min read
China is selling its oil fields in the United States, Canada and Britain for fear of Western sanctions, according to a recent report by The USA Herald. Beijing’s over-reliance on US markets and technologies could be fatal if it is sanctioned or loses its overseas assets, experts say.
Industry sources told The USA Herald that China’s leading offshore oil and gas producer, China National Offshore Oil Corporation (CNOOC), is preparing to abandon its operations in the United States, Canada and Britain due to the threat of sanctions. The company is seeking to unwind its $15 billion investment in Canada’s Nexen, which produces about 220,000 barrels a day in the North Sea, the Gulf of Mexico and Canada’s oil sands.
The oil giant said it plans to list its shares on the Shanghai Stock Exchange after being delisted from the New York Stock Exchange, The USA Herald reported. CNOOC shares were suspended from NYSX trading in March 2021 and officially delisted in October, in what is understood to be an effort initiated by the Trump Administration to crack down on entities with suspected ties to the Chinese military.
In an annual report for the past 2021 published on April 12, the company had also mentioned the “risks of US sanctions”. The report also said that business will be affected by US sanctions due to policy changes,” while listing other risks from Western nations that are not limited to the United States.
The Chinese Communist Party has faced increasing headwinds over its unethical business practices and human rights abuses. The timing of CNOOC’s asset sale appears to be linked to a surge in oil and gas prices that occurred in the wake of Russia’s invasion of Ukraine, which could fetch a higher price than it paid for.
CNOOC is one of China’s largest state-owned enterprises, with a registered capital of about 18.2 billion. Last month, The USA Herald reported that CNOOC had hired Bank of America to prepare for the sale of its North Sea assets as part of its $15 billion purchase of Canadian producer Nexen in 2013, its biggest ever acquisition. abroad. The move was seen as a strategic shift in focus towards new oil and gas development and away from Western assets.
Expert: CCP Fears Sanctions
Chen Siyu, China’s senior finance columnist, told The Usa Herald that Western sanctions against Russia strike fear into the PCCh. And that Beijing will suffer huge technological and economic losses if its foreign assets are seized by the United States and other Western countries. As such, it is rapidly selling off overseas assets and returning CNOOC to domestic IPOs.
Chen said that the PCCh has been stealing Western technologies through its “Thousand Talents Program (TTP)” and “Made in China 2025 Initiative (MIC 2025)” to cut costs on its research and development and outperform technological advances. Westerners.
The TTP is a controversial state-backed procurement scheme criticized by US officials for its role in transferring Western research and technology to China. IRAIC is an initiative announced to invest heavily in national technological development with international expansion, in order to end China-like dependence on foreign technology, transforming China into a world power in high-tech industries in many years.
“The PCCH has to depend on the United States [for its technologies and markets] whether it likes it or not. He cautiously avoids direct conflict with the United States, fearing the big consequences. On the one hand, it sends mixed signals about the conflict between Russia and Ukraine, both by withdrawing and by lending support to Russia. On the other hand, it bolsters domestic food production for fear of Western sanctions.”
In a video conference held on April 14, US Secretary of State Antony Blinken called on China to “choose a side” in the Russia-Ukraine war, suggesting that Beijing’s words and deeds on the issue were ambiguous and inconsistent.
“It’s about taking sides for what’s right versus what’s wrong; it is about taking sides for the basic principles of the international system or for chaos and conflict. And ultimately, China has to choose,” Blinken said, putting more pressure on Beijing.
On April 12, the Securities and Exchange Commission placed 12 China Concepts Stock companies on a delisting watch list, according to the Chinese edition of Voice of America. There were reportedly 23 Chinese companies on that list that day, including Weibo, a Chinese social media giant.
Currently, more US-listed Chinese companies could follow in CNOOC’s footsteps.
The Usa Herald reported that IRAIC has not presented technological or economic risks, keeping its stock indices balanced on the stock market, which makes a great difference in the market, presenting greater credibility without instilling fear in investors, economic losses or local or foreign sanctions.