If this is the reason, the US is using a rather loose and expansive definition of companies that are “affiliated” with China’s military. Until a ruling or a boundary is forthcoming, this area is disputed, and according to the Guyana-Suriname precedent, neither country should unilaterally proceed with exploitation. Mark J Valencia is an internationally recognized maritime policy analyst, political commentator and consultant focused on Asia. Both have reasonable claims to the area in dispute. China claims the Paracels and has occupied them since 1974. One subsidiary, CNOOC Limited, is listed on the Hong Kong, New York and Toronto Stock Exchanges; another, China Oilfield Services, is listed on the Hong Kong and New York Stock Exchanges. China National Offshore Oil Corporation, or CNOOC Group (Chinese: 中国海洋石油总公司 Pinyin: Zhōngguó Háiyáng Shíyóu Zǒnggōngsī), is one of the largest national oil companies in China. Vietnam claimed the rig was operating in its exclusive economic zone (EEZ), while China maintained that it was operating in its waters. But Biden could reverse this particular executive order before too much damage is done. China. CNPC was ranked fourth in 2020 Fortune Global 500, a global ranking of the largest corporations What if China retaliates by sanctioning ExxonMobil for undertaking exploration and drilling in areas it claims, such as in Vietnam Blocks 118 and 119? CNOOC owns some US oil and gas fields and partners with companies such as ExxonMobil Corp on some overseas projects. But the apparent reason for sanctioning CNOOC under this order is its involvement in China’s unilateral exploration and drilling in disputed areas of the South China Sea. If China does retaliate against ExxonMobil, it may prohibit any business dealings with it similar to its ban on business transactions of any kind with American arms suppliers to Taiwan. Pulled out of a $5 billion project to develop Iran's South Pars gas field due to sanctions-related payment issues. This includes projects in the Gulf of Mexico and Guyana, where it has a joint venture with ExxonMobil. But there may be blowback. US sanctions crippling Chinese state oil giant CNOOC’s international operations. Danske Bank. US executive order targeting Chinese companies linked in some way with the PLA could redound hard on several major American firms, Hardliners on ascent ahead of Iran’s presidential poll, Japan’s economy and leader falling in tandem, Indonesia on a fool’s errand looking for lithium, Aping Amazon, Korea’s Coupang has a labor problem, India’s Covid crisis augurs lost economic decade. Bank of Kunlun, which has been the main official channel for money flows between China and Iran since before the last round of sanctions which started in 2012, is majority owned by CNPC's listed financial arm CNPC Capital <000617.SZ>. One analytical company downgraded CNOOC stock citing the risks of a ban on US owned stock or possibly a prohibition on any connections with US businesses. State-owned China National Petroleum Corp, known as CNPC, stopped loading oil at Venezuelan ports that month. Also CNOOC may take certain measures to mitigate the risk. Indeed, whether he does so or not may be a good litmus test of his administration’s approach to China. But there is the much bigger potential problem of retaliation by China. Chinese state-controlled oil giants crashed in Hong Kong trading after Reuters reported on Monday that the Trump administration was poised to add China’s top offshore oil and gas producer to a sanctions list, threatening to cripple its international operations. Again in 2011, soon after ExxonMobil announced a discovery in Vietnam’s Block 118, China warned “foreign energy companies” against exploring in disputed areas. 04,22, 2021 Dai Houliang attends Boao Forum for Asia Annual Conference 2021 All right reserved The Frontier Post, Italy’s Satispay aims to grow abroad and triple its users by 2023, Indivior to ‘vigorously defend’ Reckitt Benckiser’s $1.4 billion claim, a decision in August against 11 Chinese firms, Stocks sink on inflation woes, as bitcoin plunges. First, China is North Korea’s most important fuel supplier. The foreign joint venture partners, which have not … This move by President Donald Trump’s administration during his lame-duck period will make it more difficult for President-elect Joe Biden to revive relations with Beijing. Although the proposed prohibition on US investors owning securities in the company would not begin until November next year, the news was followed immediately by a decline of CNOOC Ltd’s stock by 14%. Indeed, to survive in the long term CNOOC may have to split up or terminate some of its businesses. According to the US State Department, Vietnam uses a baseline for its EEZ and continental-shelf claims in the disputed area that does not conform to UNCLOS (United Nations Convention for the Law of the Sea) stipulations. The sale of a key subsidiary nationalizes 11% of Russia's oil production. CNOOC slumped as much as 13.4 per … Trump himself signed an executive order earlier this month banning US persons from transacting in securities of “Communist Chinese military companies.”, “The most damaging would be restrictions on access to US dollar financing, or equally bad, restricting work with US companies or persons,” said Neil Beveridge, a senior analyst at Sanford C. Bernstein. Apparently this order will force these investors to divest. CNOOC said that it was “shocked and regretful,” that the action was based on “false and inaccurate” information, and that it is now “comprehensively assessing the impact of the situation on the group.”. In 2008, Beijing warned it against proceeding there, suggesting that its business in China could be at risk. PetroChina, the listed arm of China National Petroleum Corporation, dropped 6.1 per cent to HK$2.47 while. But the pond of heavy oil is much shallower due to sanctions on Venezuela and Iran. Denmark If China owns the Paracels and is entitled to a 200-nautical-mile EEZ and an extended continental shelf, China has a legitimate claim to part of Vietnam’s claimed EEZ and continental shelf. Indeed, it is now building a US$10 billion petrochemical complex in China. State-owned China National Petroleum Corp, known as CNPC, stopped loading oil at Venezuelan ports that month. SCCI asks government to incorporate its proposals in... Colonial Pipeline hacker Darkside reaped $90M from 47... 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The Treasury Department announced today that economic sanctions against Sudan have been applied to Sudan's state-owned oil enterprise Sudapet Ltd. and to the Greater Nile Petroleum Operating Company Ltd. (GNPOC), a joint venture in Sudan between the Government of Sudan, three foreign oil companies, and Sudapet. China’s national oil company, China National Petroleum Corp., cut off direct purchases with Venezuelan oil traders. The US government has officially sanctioned China’s third-largest oil company and largest offshore petroleum producer, China National Offshore Oil Corporation (CNOOC). Benoit Faucon, "China Pulls Out of Giant Iranian Gas Project," The Wall Street Journal, October 6, 2019. China may conclude that the US has lured it into the global capitalist system and is now using it to punish and manipulate it. Beveridge cautioned that the Reuters report remained unconfirmed. CNOOC Group focuses on the exploitation, exploration and development of oil and gas offshore China, along with its subsidiary COOEC (China Offshore Oil Engineering Company). Indeed, China may come to regret the day it adopted “capitalism with Chinese characteristics” and act accordingly. It is the third-largest national oil company in the People's Republic of China, after CNPC (parent of PetroChina) and China Petrochemical Corporation (parent of Sinopec). China’s largest energy company, National Petroleum Corp., has cancelled plans to directly purchase some 5 million barrels worth of Venezuelan oil this month in the aftermath of the latest executive order by US President Donald Trump against the Latin American country, according to people with knowledge of the situation requesting anonymity, reported Bloomberg. CNPC employees won National May 1 Labor Medals and honor of National Pioneer Workers 2021. 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Worse, it could stimulate a rethink in China regarding its economic interdependence with the US. More by Mark Valencia. That means ExxonMobil’s drilling in these contracts let by Vietnam would be just as legally questionable as that of CNOOC’s drilling there. China National Petroleum Corp. has pulled out of a $5 billion natural-gas project in Iran as escalating tensions threaten to sever Beijing’s trade … China National Petroleum Corporation (CNPC) Energy. 04,30, 2021 PetroChina Recorded Net Profit of RMB27.7 Billion in First Quarter of 2021. As of end-November US investors held about 16.5% of CNOOC’s shares. Most recently he was a visiting senior scholar at China’s National Institute for South China Sea Studies and continues to be an adjunct senior scholar with the Institute. Yukos plans to fight the move in international court. Banking. China Petroleum & Chemical Corp or Sinopec fell 6.9 per cent to HK$3.51. It also uses American technology and equipment. The company is owned by the Chinese government. The oil explorer is a 64 per cent-owned flagship of China National Offshore Oil Corp.The potential action against CNOOC, as reported by Reuters, and other Chinese corporations would follow a decision in August against 11 Chinese firms and a designation of 20 top Chinese firms including those “owned or controlled” by the People’s Liberation Army.The escalation in sanctions is likely to make life harder for President-elect Joe Biden in his policy on the soured US-China relationship. It has been a year since Tehran expanded the role of the China National Petroleum Corporation (CNPC) to replace Total after the French company pulled out because of tightening US sanctions. It argues among others that Vietnam recognized its claim in a 1958 letter from Vietnam’s premier at the time, Pham Van Dong, to China’s then-premier Zhou Enlai. So what if the Ottomans shaped the modern world? China has threatened retaliation against ExxonMobil before for doing what the US now alleges CNOOC is doing. It is not clear why CNOOC was targeted. In May 2014, CNOOC Ltd moved a CNOOC Group-owned drilling rig, Haiyang Shiyou 981, into the area and drilled just east of Vietnam’s Block 119. “This could effectively paralyse CNOOC’s international operations. In another move to pre-empt its successor’s foreign policy, the Donald Trump administration has imposed 11th-hour sanctions on one of China’s energy giants over its activities in the South China Sea. Valencia has published some 15 books and more than 100 peer-reviewed journal articles. China has said it will ban exports of some petroleum products to North Korea, as well as imports of textiles from the isolated country, in line … Enter your email address to subscribe to The Frontier Post and receive notifications of new stories by email. But the US seems to be implicitly taking Vietnam’s side in its various relevant disputes with China including this one. The push is part of a broader attempt by China and Iran to mend fences after the cancellation of a $2.5 billion oil-field deal with another Chinese state-owned giant, China National Petroleum Corp. Production at the Sinopec-run Yadvaran project, near the Iraqi border, has increased to about 50,000 barrels a day from 25,000 barrels a day in early April, the people said. ExxonMobil is America’s third-largest company and is heavily invested in China. The executive order prohibits US individuals and companies from transacting publicly traded securities of “Communist China military companies” – companies that are in some way affiliated with the People’s Liberation Army. 2019/10/06. The China National Petroleum Corporation is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. CNOOC’s foreign operations account for about one-third of its total production. But the executive order may not initially be too serious a blow to CNOOC because it is so far limited to divestment (joint-venture investments are apparently not prohibited), American holdings are relatively small, and there is uncertainty as to whether it will be continued by the incoming Joe Biden administration. China Petroleum & Chemical Corp or Sinopec fell as much as 5.3 per cent to HK$3.57. There are several reasons why fuel prices are an important part of the narrative for sanctions pressure on North Korea. U.S. President Donald Trump in May ordered sanctions to be reimposed after withdrawing from a 2015 nuclear accord with Iran that … CNOOC slumped as much as 13.4 per cent to HK$8.18, set for the biggest one-day slump since a 17.2 per cent setback on March 9, just weeks before global oil prices slipped below zero for the first time. Its holdings range from gas marketing to petrochemicals. Chinese state-controlled oil giants crashed in Hong Kong trading after Reuters reported on Monday that the Trump administration was poised to add China’s top offshore oil and gas producer to a sanctions list, threatening to cripple its international operations. So the sanctions or the fear of their expansion will have some US domestic effect. Will it be an improvement or more of the same? This does not feel like a buy-on-the-dip moment.”. (Reuters, 5/10/2019). imposing sanctions on Sudan, China poured an estimated $15 billion into Sudan,14 and China’s main oil operator in Sudan, the state-owned China National Petroleum Corporation (CNPC), has itself invested at least $5 billion in the country.15 This cozy bilateral relationship was strengthened by Chinese President Learn more about how we use cookies in our cookie policy. If so, these escalating sanctions would be a pyrrhic victory for the US. Chinese state companies China National Petroleum Corp (CNPC) and PetroChina - long among PDVSA's top customers - stopped loading crude and fuel at Venezuelan ports in August 2019 after Washington extended its sanctions on PDVSA to include any companies trading with the Venezuelan state firm. ExxonMobil has also undertaken drilling in areas claimed by both Vietnam and China. "China Petrochemical Corp (Sinopec Group) and China National Petroleum Corp (CNPC), the country’s top state-owned refiners, are skipping Iranian oil purchases for loading in May after Washington ended sanction waivers to turn up pressure on Tehran, three people with knowledge of the matter said." PetroChina, the listed arm of China National Petroleum Corporation, also dropped as much as 5.7 per cent to HK$2.48. Notably, Jinxi is owned and operated by PetroChina, which is affiliated to China National Petroleum Corporation (CNPC), a long-time buyer of Iranian oil and the parent company of Bank of Kunlun, the financial institution that has been at the heart of China … This site, like many others, uses small files called cookies to help us improve and customize your experience. China remains one of the biggest buyers of Iran crude oil, in spite of U.S. sanctions. Its headquarters are in Dongcheng District, Beijing. Covering geo-political news and current affairs across Asia. Copyright © 2021.
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