Page 7 - NorthAmOil Week 16 2022

NorthAmOil COMMENTARY NorthAmOil

CNOOC has struggled
with operational issues
at its Long Lake project
in Canada, where an
upgrader has been
offline for six years.

largest ever overseas acquisition, which helped of a vacuum tower at Long Lake by the end of
turn the company into a major global oil and 2022 or early 2023.
gas producer. However, managing the assets has
proved challenging owing to red tape and high What next?
operating costs compared with oil and gas oper- CNOOC will also doubtless be seeking to ben-
ations in developing countries. Indeed, Reuters efit from strong oil and gas prices and offload
cited one source this week as saying CNOOC the assets for a higher price if a sale of some or
was seeking to sell “marginal and hard-to-man- all of its US, UK and Canada operations does go
age” assets across the US, UK and Canada, hav- ahead. At the same time, it is seeking to acquire
ing previously told the news service managing new assets in countries across Africa and Latin
the assets was “uncomfortable” for the company. America. According to Reuters’ sources, it wants
“Assets like Gulf of Mexico deepwater are to prioritise the development of major prospects
technologically challenging and CNOOC really in Brazil, Guyana and Uganda. At the same time,
needed to work with partners to learn, but com- While the company has not confirmed what
pany executives were not even allowed to visit it intends to do, it issued a warning about the it is seeking
the US offices,” the source was quoted as saying. possibility of sanctions in its prospectus ahead to acquire
“It had been a pain all along these years and the of the IPO in Shanghai.
Trump administration’s blacklisting of CNOOC “We cannot predict if the company or its affil- new assets in
made it worse.” iates and partners will be affected by US sanc-
CNOOC owns stakes in the Appomattox tions in future, if policies change,” CNOOC countries across
and Stampede fields in the Gulf, and also has stated.
onshore US assets in the Eagle Ford and Nio- The company intends to use the proceeds Africa and Latin
brara shale plays. In Canada, the company has from its listing to fund seven oil projects and one America.
stakes in projects including the Long Lake and gas development in China and overseas, as well
Hangingstone oil sands developments and as replenishing capital. It noted that fundraising
in the UK North Sea it operates the Buzzard, would be expanded to CNY32.29bn ($5.07bn)
Golden Eagle and Scott fields. if an over-allotment “greenshoe” option to buy
In Canada, CNOOC has also run into opera- and sell more shares, issued to investment banks
tional issues. This week, it was also reported that underwriting the deal, is fully exercised.
the company had been given regulatory permis- CNOOC’s ambitions to expand overseas
sion to restart its Long Lake oil sands upgrader, appear to be far from over, but it now looks
which had been offline for six years following increasingly likely that future expansion will be
an explosion at the site. Regulatory filings show focused on developing countries rather than the
that CNOOC is planning to resume operation US, UK and Canada.™

Week 16 21•April•2022 www. NEWSBASE .com P7