The House Armed Services Committee said Friday it will hold a hearing on Wednesday to decide whether a possible merger of Unocal Corp. with the China National Offshore Oil Corp. (CNOOC) raises national security concerns.
Also on Friday, attorneys general from Texas, California, Montana and New Mexico are seeking assurances that the company will honor its environmental obligations in the event CNOOC’s $18.5 billion offer is successful.
Chevron Corp. already has received federal regulatory approvals in its $16.3 billion bid for Unocal, and Unocal plans a shareholder vote on the offer in early August. However, Unocal is said to still be considering the CNOOC offer.
According to a statement from the Armed Services Committee, Richard D’Amato, chairman of the U.S.-China Economic and Security Review Commission and Frank Gaffney, president of the Center for Security Policy, are scheduled to testify at the congressional hearing. Additional witnesses may be added, according to the panel.
The House of Representatives has already issued a nonbinding resolution that expresses concerns regarding a “Chinese state-owned energy company exercising control of critical U.S. energy infrastructure and energy production capacity.” The House also has passed an amendment to an annual appropriations bill to block the Bush administration from using any funds to “recommend the approval” of CNOOC’s bid (see Daily GPI, July 5).
Meanwhile, the attorneys general of four states are expressing concerns that Unocal’s obligations to clean up facilities in their states may be more difficult to enforce if Unocal is acquired by CNOOC. They requested information on CNOOC’s business plans and assurances on Unocal’s liabilities by mid-July.
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