US president Donald Trump has intensified his assault on China in the final days of his presidency, with the Office of Foreign Assets Control (OFAC) of the Department of the Treasury adding CNOOC Ltd to the list of Chinese companies with alleged ties to the country's military.

The move has heightened the risk for the top Chinese offshore operator of being delisted from New York Stock Exchange, where it has traded shares since February 2001.

The latest move — which follows a similar sanction imposed on CNOOC Ltd’s parent China National Offshore Oil Corporation by the US Department of Defense (DoF) — could also see CNOOC Ltd face a number of other restrictions, such as ban on Americans citizens from investing in the company.

CNOOC Ltd said in a statement that it regrets the “decision and action of OFAC".

The company said that, since its 2001 listing, it has “strictly complied with the laws, regulations and regulatory requirements of its listing venues and has been operating in accordance with laws and regulations".

In the meantime, CNOOC Ltd is “assessing the impact of the situation and will closely monitor relevant development of the situation” and has advised its shareholders and investors “to exercise caution when dealing in CNOOC Ltd’s securities".

CNOOC is one of 22 Chinese entities listed by OFAC as allegedly having ties with the Chinese military.

While there is no clear criteria from OFAC as to what constitutes ties to the Chinese military, the sanction is seen by market observers as linked to wider moves by the Trump administration against Chinese businesses.

Trump signed an executive order in November banning US businesses from investing in companies on the DoF list.

On 7 January, the NYSE said it will delist three Chinese telecommunications companies — China Telecom, China Mobile and China Unicom — ending trading of their shares on 11 January, in order to comply with Trump’s order.

The NYSE’s decision is based on a new law that Trump approved in December that could lead to the delisting of all foreign companies that cannot prove that they are not controlled by a foreign government.

The potential delisting of CNOOC Ltd could hurt US investors, who would liquidate their holdings, as well as the funds that hold CNOOC Ltd’s stocks, Chinese securities sources said.

A spokesman for China’s securities watchdog, the China Securities Regulatory Commission, said the delisting of three Chinese companies by the NYSE disregarded “related companies' actual conditions and global investors' legitimate rights and interests and severely disrupted market order".

He continued: “The delisting of the Chinese companies on a politically motivated administrative order of the US government seriously breached market rules and order,” adding that the move showed the arbitrariness and uncertainty of the country's rules and regulations.

Finance

CNOOC Ltd faces delisting from NYSE due to alleged military ties