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Cnooc, Sinopec, CNPC in Talks for Shell’s Russian Gas Stake

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CnoocCNPC and Sinopec Group are in talks with Shell Plc to buy its stake in a major Russian gas export project, Bloomberg is reporting citing people with knowledge of the matter.

China’s key state-run energy companies are in joint discussions with Shell over the company’s 27.5% holding in the Sakhalin-2 liquefied natural gas venture after the European and other Western firms exited Russian operations following the Ukraine invasion, said the people, who requested anonymity to discuss private details.

It was reported last week that China’s state-owned oil and gas corporation China National Offshore Oil Corporation (CNOOC) is reportedly preparing to exit from the US, UK and Canada due to mounting concerns about sanctions, regulations and rising costs.

Relations between China and Western countries have soured over the past several years. Beijing’s ties with Washington were shattered after former US President Donald Trump launched a large-scale trade war, hitting a wide range of Chinese goods with import levies.

Tensions have been mounting recently after China refused to condemn Russia’s military operation in Ukraine.

CNOOC, China’s top offshore oil and gas producer, is currently seeking to leave the West by selling “marginal and hard to manage” assets in the three nations, according to unnamed industry sources quoted by Reuters.

The sources, who spoke on condition of anonymity because of the sensitivity of the issue, told the agency that the company’s top management found it “uncomfortable” to manage its Western assets because of regulations and high operating costs.

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