CNOOC Ltd’s proposed $3 billion sale of its U.K. portfolio has stalled due to a disagreement between the Chinese oil giant and potential buyers over the value of the assets.
CNOOC had been planning to sell its U.K. portfolio, which includes some of the North Sea’s most productive fields, to a consortium of buyers. However, talks have broken down due to a sizable gap between the two sides’ valuations.
According to sources close to the situation, the buyers had offered CNOOC $3 billion for the portfolio, which consists of a mix of producing and development assets. CNOOC, however, remains unwilling to accept less than $4 billion for the package.
The Hong Kong-listed firm had been hoping to divest its U.K. assets as part of a broader plan to exit the North Sea, an area in which it has lost money in recent years. The sale process began in February, but the current impasse over price means the divestment is likely to take much longer than expected.
CNOOC, who is leading the sale process, has refused to comment on the stalled negotiations. However, a source close to the company said, “It’s a complex deal and we’re still working to bridge the gap between both parties.”
The consortium of buyers, which includes a mix of private equity funds and regional operators, remains confident of reaching a deal. A spokesperson for the group said, “We remain confident in our ability to complete the transaction, and we remain committed to the process.”
With both sides still far apart on price, it remains to be seen whether CNOOC will eventually be able to push through its $3 billion asset sale.