• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 3 hours China wields coronavirus to nationalize American-owned carmaker
  • 19 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 10 hours Open letter from Politico about US-russian relations
  • 1 day US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 3 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 3 hours Trump Hands Putin Major Geopolitical Victory
  • 3 hours COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 9 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 19 hours Trump is turning USA into a 3rd world dictatorship
  • 3 days China's impending economic meltdown
  • 2 days Liquid Air Battery
  • 2 days What the heroin industry can teach us about solar power (BBC)
  • 3 days The Truth about Chinese and Indian Engineering
COVID Fears Drive Oil Prices Downwards

COVID Fears Drive Oil Prices Downwards

Despite significant oil inventory declines…

Oil Prices Could Break $50 In 2021

Oil Prices Could Break $50 In 2021

IHS Markits has raised its…

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.

Related: Saudis To Pump More Crude Oil In The Next Three Months

The latest chapter in the drama involved U.S. import tariffs on US$200 billion worth of Chinese goods, with Beijing retaliating by slapping tariffs on US$60 billion worth of products and commodities, notably including liquefied natural gas. For now, oil is off the list of goods subject to tariffs, but as tension continues to intensify it’s anyone’s guess when or if it will be added to the next list.

The latest threat of President Trump is to impose tariffs on virtually all things coming from China. China, meanwhile, is cutting import tariffs on products coming from other countries. The South China Morning Post reports that as a result of the cuts, aimed at easing the burden on local companies and consumers, the country’s overall tariff level is now 7.5 percent, compared with 9.8 percent in 2017, as per a statement from the State Council.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh G Salameh on September 27 2018 said:
    It is not surprising at all that the Chinese energy company Nexen, a unit of CNOOC, is preparing to pull out of the United States as a result of the escalating trade war between the US and China.

    One thing, however, is certain. The United States can’t win a trade war with China and will eventually be forced to back down.

    If China was hindered by rising US tariffs from selling $800-billion worth of goods annually in the US, it can sell them somewhere else as its economy is far more integrated than the US economy in the global trade system supported by its silk and belt road initiative.

    The US on the other hand may have to replace Chinese imports with more expensive imports from elsewhere. This will lead to rising costs for US customers, higher inflation, widening budget deficit and rising outstanding debts by at least 2.35%. In other words, the US will be the eventual loser in a full trade war with China.

    In view of the above, the Trump administration will be forced to cut its losses by bringing to an end its escalating trade war with China since it could never win this war.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News