Shadia Nasralla, Ron Bousso, and Chen Aizhu

LONDON, (Reuters) – China’s largest offshore producer CNOOC Ltd (NYSE:) Ltd plans to leave one of the North Sea’s most important fields in a shift strategic focus towards newer oil-and gas developments. This will be supported by industry and banking sources.

CNOOC has engaged Bank of America (NYSE 🙂 for the preparation of a formal sale of North Sea assets. The potential proceeds could exceed $3 billion according to sources.

CNOOC declined comments. Bank of America declined comment.

CNOOC bought the North Sea assets of Canadian producer Nexen for $15 billion in 2013. This was their largest international acquisition.

CNOOC then took over operation of Britain’s largest oilfield Buzzard. CNOOC’s crude oil was one of those streams that established the North Sea benchmark oil oil price.

This sale is scheduled to coincide with an abrupt rise in world oil and gas prices due to tightening global supplies, and Russia’s incursion into Ukraine at the beginning of February.

Sources said that buyers and sellers are not likely to reach an agreement on asset values due to extreme market volatility.

CNOOC holds 43.2% of the Buzzard oil field. It oversaw the investment for new wells to stop its decline in output. Buzzard today produces approximately 80,000 barrels a day.

CNOOC operates the Scott, Telford, and Rochelle North Sea clusters and also holds stakes there. It has a 36.5% stake at the Golden Eagle field.

Chinese executives in the industry said that the plan to sell was part of a larger review of CNOOC’s international assets. CNOOC seeks new development opportunities in Guyana, Uganda and Guyana as well as its largest and most profitable assets.

Sources claimed that CNOOC’s highest management, which includes chairman Wang Dongjin (chairman), found it difficult to manage Nexen assets in Western countries such as Britain and Canada, due to red tape and higher operating costs than those of developing nations.

The growing trade tensions between China & the United States, made worse by China’s position on the conflict in Ukraine, also played a part. China worries that possible sanctions or tarrifs could affect its future investments.

Because the sale of this property is still private, all the sources requested not to be identified.

According to two Chinese sources, CNOOC has gained confidence from its success in large scale discoveries in China offshore, in particular in the Bohai Bay region.

CNOOC announced Wednesday a record year-end net profit of 2021. Earnings have nearly tripled since 2020.