Chinese firms are now reportedly the largest oil operators in the UK North Sea and may continue expanding presence in the region to boost China’s international profile.
According to an analysis conducted by the Times, CNOOC’s wholly owned subsidiary Nexen Energy produces about 200,000 barrels per day in the UK North Sea, or about 10 percent of the region’s total output.
Nexen operates the Buzzard and Golden Eagle fields in the UK North Sea.
Nexen also holds an operating stake in the Ettrick field, a majority interest in the Blackbird field and is the operating partner of the Scott platform.
CNOOC’s total production figures for the UK North Sea are not available to the public.
According to CNOOC’s first quarter review, the company produced 10.3 million barrels of crude and liquids in Europe during the first quarter and 4 billion cubic feet of natural gas.
Analysts who spoke to the Times said China has continued to expand its UK North Sea footprint despite low crude prices because the country sees it as an important route to soft power.
Production in the UK North Sea has been declining for over a decade as the region’s largest fields start to mature.
Operating costs in the region remain high, making the area a less attractive investment while oil prices are low.
Earlier this year, a survey sponsored by law firm Bond Dickinson found that three in four North Sea oil and gas contractors are “less confident about their prospects than they were a year ago.”
Only 14 percent of contractors surveyed said they are working at or above optimum levels in the UK Continental Shelf, a significant decline from 79 percent three years ago.
Professor of international development at Bristol University Jeffrey Henderson told the Times that, while low oil prices may make North Sea investments less attractive, China’s interest in the region is part of a larger strategy.
“It may be part of a general strategy to boost the credibility and legitimacy of Chinese companies operating within Europe,” Henderson told the Times.