Chinese oil giant Cnooc (TSX: CNU) is putting plans in place to pull out of the North Sea, according to reports.
Reuters says Bank of America has been drafted in to start preparing a formal sale of the company’s assets in the region, which includes Buzzard, one of the North Sea’s largest producing fields.
It marks a “strategic shift” for Cnooc as the company targets other oil and gas developments and distances itself from the West, banking and industry sources told the news agency.
It is claimed the sale could generate more than $3 billion.
Energy Voice has contacted Cnooc for comment.
Cnooc gained a foothold in the North Sea through its £9.4bn acquisition of Nexen in 2013 – the Canadian company changed its name to Cnooc International in 2019.
At the time it was the largest foreign business takeover by China.
Cnooc’s potential decision to exit the North Sea comes at a time when global oil and gas prices are at their healthiest in recent memory.
Concerns about tightening supplies following Russia’s invasion of Ukraine mean the cost of both commodities have hit a high not seen in years.
Buzzard is located around 62 miles north-east of Aberdeen in average water depths of about 96 metres.
At the time Cnooc said the second phase of the field, in which it holds 43.21%, is forecast to reach its peak production of approximately 12,000 barrels of oil equivalent per day (boepd) in 2022.
It is expected to take the total production of Buzzard, formerly operated by Nexen, to 80,000 boepd in total.
Buzzard yielded first oil in 2007 and since then has produced more than 800 million barrels of oil equivalent.
Cnooc’s is also the operator of the North Sea’s Golden Eagle and Scott assets.
The Golden Eagle platform is located about 69 miles north-east of Aberdeen and produced first oil in 2014.
EnQuest (26.69%), NEO Energy (31.56%) and ONE-Dyas (5.21%) also hold interests in the field and its facilities.
Scott is around 115 miles north-east of Aberdeen and lists Dana Petroleum (20.64% Scott), Energean (10.47% Scott), NEO Energy (5.16% Scott) and MOL Operations (21.84% Scott) as its stakeholders.
Reuters reported that two Chinese oil chiefs said Cnooc’s planned sale was part of a wider review of its assets.
The company wants to prioritise its “most profitable and largest assets”, in addition to new schemes in Guyana and Uganda.