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Chevron’s $1B Chinese Offshore Oil Asset Sale Hits A Snag

Offshore

Chevron’s plan to sell its non-operated interests in oilfields offshore China for up to $1 billion has been stalled since the U.S. major has not received good enough bids, Bloomberg reported on Tuesday, quoting people in the know.

Chevron had planned to sell the stakes it holds in three oilfields in the Bohai Bay in China, but since no bidder has matched the price the U.S. group had been aiming for, Chevron is thinking of keeping the interests for now, Bloomberg’s sources said.

According to the sources, Chinese companies AAG Energy Holdings, Brightoil Petroleum Holdings, and Meidu Energy Corp have expressed interest in Chevron’s Bohai Bay assets.

Chevron China Energy Company (CCEC) is a non–operated joint venture partner with Chinese state firm CNOOC in three fields in Bohai Bay. Chevron’s Chinese unit holds a 24.5-percent working interest in the QHD32–6 field, and 16.2 percent in each of the Bozhong 25–1 and the Bozhong 19–4 fields, with CNOOC being the operator for all three fields and holding the rest of the working interests.

In its 2Q 2016 earnings conference call presentation, Chevron said that it was targeting to generate proceeds before tax of between $5 billion and $10 billion from asset sales in the period 2016-2017. The group has been targeting well-timed transactions to capture good value, with divestment criteria being non-strategic fit of the assets, and such assets that are unable to compete for capital.

Related: Is China The Next Key Influencer In The Middle East?

In August last year, Chevron was said to be aiming to sell $5 billion worth of Asian assets involved in upstream operations.

In December, the U.S. supermajor announced the sale of its Indonesian and Philippines geothermal assets, while last month Chinese state-held company Zhenhua Oil was said to have signed a preliminary deal to buy Chevron’s natural gas fields in Bangladesh estimated to be worth around $2 billion.

By Tsvetana Paraskova for Oilprice.com

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