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Over on The Oil Drum Ianqui links to the news that the US Congress is in the process of blocking the Chinese CNOOC bid on Unocal. The New York Times (registration required) gives more details.
CNOOC is currently competing with Chevron to take over Unocal. Apparently many members of Congress see this move as a threat to 'national and energy security in the United States'. Funny thing is though that Congress hasn't acted this forcefully to other foreign takeovers in the past years in the American oil industry. And, the current planned take over is not likely to affect American oil and gas supplies all that much. The more interesting parts of Unocal activities are Asian based in for example Indonesia.
It's interesting to see the Congress reaction to something about which most analysts agree on won't make all that much of a difference to the US' energy situation. CNOOC still has a few weeks to get its things in order, and I'm curious to see what will happen.
One of the more interesting parts in the NYT article shows the opposing views:
It's very important to realize what the consequences could be of blocking the CNOOC bid. China will want to get its oil from somewhere and already has substantial interests in Iran and Sudan. It will be easy to expand these activities, which will be contrary to American interests.
CNOOC is very much acting out of strategic interests; not surprising as it is state-owned for 70%. This obviously gives it a very different rationale for its activities than other US and Europe-based oil/gas companies. Others have also pointed out the inconsistency of the Congress' actions with the US ideas about free trade.
There are a few more articles on China's hunt for oil here:
China's costly quest for energy control (NYT)
China's global hunt for oil (BBC news)
CNOOC is currently competing with Chevron to take over Unocal. Apparently many members of Congress see this move as a threat to 'national and energy security in the United States'. Funny thing is though that Congress hasn't acted this forcefully to other foreign takeovers in the past years in the American oil industry. And, the current planned take over is not likely to affect American oil and gas supplies all that much. The more interesting parts of Unocal activities are Asian based in for example Indonesia.
It's interesting to see the Congress reaction to something about which most analysts agree on won't make all that much of a difference to the US' energy situation. CNOOC still has a few weeks to get its things in order, and I'm curious to see what will happen.
One of the more interesting parts in the NYT article shows the opposing views:
"We cannot afford to have a major U.S. energy supplier controlled by the Communist Chinese," Mr. Pombo said on the House floor. "If we allow this sale to go forward we are taking a huge risk."
But Representative Jim Moran, a Virginia Republican, said blocking the Chinese bid was a dangerous move. "They are holding a financial guillotine over the neck of our economy, and they will drop that if we do things like this that are not well considered," Mr. Moran said on the House floor. "If we don't let them invest in western firms, what are they going to do? They are going to invest in Iran or Sudan and make those governments much stronger than they are today."
It's very important to realize what the consequences could be of blocking the CNOOC bid. China will want to get its oil from somewhere and already has substantial interests in Iran and Sudan. It will be easy to expand these activities, which will be contrary to American interests.
CNOOC is very much acting out of strategic interests; not surprising as it is state-owned for 70%. This obviously gives it a very different rationale for its activities than other US and Europe-based oil/gas companies. Others have also pointed out the inconsistency of the Congress' actions with the US ideas about free trade.
There are a few more articles on China's hunt for oil here:
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