Two top Texas congressmen, both Republicans, have expressed their "deep concern" about the $18.5 billion bid for Unocal Corp. by the China National Offshore Oil Corp. (CNOOC) in a letter to President Bush.
Rep. Joe Barton, chairman of the House Energy and Commerce Committee, and Rep. Ralph Hall, chairman of the House Energy subcommittee, joined several other legislators in recent days who have expressed their national security concerns about energy supplies following CNOOC's takeover bid last week (see Daily GPI, June 24). A $16.5 billion offer by Chevron Corp. is already moving through regulatory channels and is nearing a shareholder vote.
In their letter to Bush, Barton and Hall wrote, "This transaction poses a clear threat to the energy and national security of the United States. We urge you to protect American national security by ensuring that vital U.S. energy assets are never sold to the Chinese government."
The congressmen said that the move by CNOOC, which is 70% owned by the Chinese government, was attempting to purchase Unocal so that it could "lock up energy supplies around the world...largely dedicated for their own use."
CNOOC's offer, they wrote, is "simply the latest, and most significant, step in this strategy. If approved, the transaction would put vital oil assets in the Gulf of Mexico and Alaska directly into the hands of a company controlled by the government of China."
Unocal, said the congressmen, has a "host of highly advanced technologies," many of which "have dual-use applications...Given the potential military threat posed by China to our allies in Asia and our security interests, it is of the utmost importance that U.S. export control laws be strictly applied to ensure that no sensitive technology falls into the hands of the Chinese government, which can later be used to undermine our national security."
Since it made its offer to Unocal, CNOOC has appealed to the United States to not allow politics to interfere. In a news briefing Tuesday, a spokesman for China's Foreign Ministry said that the talks between CNOOC and Unocal are "normal commercial activities between enterprises and other people should not be surprised and try to interfere on political grounds.
CNOOC Chairman Fu Chengyu sent a letter to Congress on Monday that said that the company was ready to face U.S. government scrutiny about national security implications. He noted that in total, Unocal supplies about 1% a year of the U.S. supply of oil and natural gas. Fu is leading a Chinese delegation to the United States this week to discuss the offer with Unocal.
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