The White House intends to impose sanctions on China's main deepwater drilling company, China National Offshore Oil Corp. Thus, Donald Trump decided to end his presidency with a blow to China's largest drilling company.
The upcoming step is viewed by the Western media as an attempt to drive Joe Biden into a tough position on Beijing amid bipartisan anti-Chinese sentiment in Congress. For example, Reuters reported last week that the Trump administration may soon name 89 Chinese companies with military ties, limiting their ability to purchase certain American goods and technology.
It is expected that CNOOC will be punished for the production of hydrocarbons on the shelf of the South China Sea. Three more companies are added to the sanctions lists, which, according to Washington, are controlled by the PRC military.
CNOOC is the leader in oil production on the PRC shelf and produces oil far beyond the territorial waters of China - 200 miles off the coast of Vietnam and the Philippines. According to the American authorities, drilling in these areas is part of the PRC's strategy to expand its military presence in the South China Sea. The difficulty lies in the fact that CNOOC also has oil and gas sites in the United States and actively cooperates with the American ExxonMobil.
However, the Chinese company announced the start of production at the new gas field, Luhua 29-1 in the eastern part of the South China Sea.
“The gas field will fully utilize the existing production facilities of the Liuhua 34-2 gas field and the Liwan 3-1 gas field. Peak natural gas production is expected to be approximately 62 million cubic feet per day in 2022, ”CNOOC said.
Financial sanctions against CNOOC, including a ban on attracting funding, will deal a "hard blow" to the company, since it is involved in joint projects with the American ExxonMobil, and in addition, uses American equipment, says SIA Energy analyst Sengik Tei.