The move was the latest in escalating sanctions against the firm that prompted S&P Dow Jones Indices to de-list the company late Wednesday.
It also reflects outgoing President Donald Trump’s flurry of last minute pressure on Beijing as his days in office wind down, following four years of aggressive diplomatic and trade policies against the rival economic power.
“China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to US national security and the security of the international community,” Commerce Secretary Wilbur Ross said in a statement.
“CNOOC acts a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes.”
The territorial dispute has festered for years, with Beijing ignoring US protests as it built a series of artificial islands to expand its military and commercial reach in the region that is believed to have valuable oil and gas deposits.
China claims nearly all of the South China Sea, including the Spratly Islands, though Taiwan, the Philippines, Brunei, Malaysia and Vietnam all claim parts of it.
“CNOOC has repeatedly harassed and threatened offshore oil and gas exploration and extraction in the South China Sea, with the goal of driving up the political risk for interested foreign partners, including Vietnam,” the Commerce Department said.
Commerce’s decision follows the Treasury Department announcement last week that it would add CNOOC to its sanctions list, which aim to freeze any assets under US jurisdiction and bans American firms — including banks and other companies with branches in the United States — from doing business with them.
S&P Dow Jones Indices said the company will strip CNOOC from its stocks list “on or before February 1.”
Commerce also tightened restrictions on Chinese tech firm Skyrizon, citing ties to the Chinese military which “pose a significant threat to US national security and foreign policy interests,” Ross said.
That means US firms will need a license to do business with the company.