China’s Nexen Prepares To Pull Out Of U.S. Gulf Of Mexico

Chinese energy company Nexen, a unit of CNOOC, is preparing to pull out of the United States amid rising trade tensions, Reuters reports , citing three unnamed sources with knowledge of the company’s plans.

Canada-based Nexen became part of CNOOC back in 2013, with the Chinese company paying over US$15 billion. The acquisition gave it a presence in the Gulf of Mexico, including a 25-percent holding in the Stampede field, operated by Hess Corp. and 21 percent in Shell’s Appomattox field. Stampede has recoverable reserves estimated at 300-350 million barrels of oil, while Appomattox holds an estimated 700 million barrels in probable oil and gas reserves.

A spokeswoman for CNOOC said, as quoted by Reuters, that the company had no plans of exiting its GOM operations but was considering selling parts of its interests there and had not scheduled any new investment in exploration in the region.

Nexen is also one of the biggest oil and gas operators in the North Sea, where it operates three fields: Buzzard, Golden Eagle, and Scott. The company also has assets in West Africa, Colombia, and Canada.

If the company does leave the United States, it will be just part of the fallout from the trade war between Washington and Beijing that President Trump started, blaming China for a hefty trade deficit between the two countries, and accusing it of using unfair trade practices. The accusations quickly led to the first round of tariffs, which China responded to in-kind.

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