CNOOC's Unocal bid meets with trouble

Forty-one US lawmakers recently wrote a joint open letter to US President George W. Bush urging the Bush administration to take a closer look at 18.5 billion US dollar cash bid by China National Offshore Oil Corp (CNOOC) last week to acquire US-based Unocal. The review will determine whether the acquisition poses any risks to US national security.

The letter was signed not only by members of Congress from the Democratic Party, but also by Republicans. They expressed that they feel very worried about the bidding price of 67 US dollars per share and warned the US government in their letter that once the acquisition is successful, it will constitute a threat to US national security, and, at the same time, the relevant patent technologies of Unocal will likely be obtained by CNOOC.

Chevron Corp, the rival of CNOOC, made a 16.4 billion dollar cash and stock offer to buy the corporation. Chevron is reportedly trying to prevent CNOOC from purchasing Unocal, claiming that CNOOC's acquisition might pose risks to US national security and energy policy. Experts pointed out that there would be a fiery contest between CNOOC and Chevron.

Some officials from associations and societies in the United States said, in fact, that it is superfluous for the members of Congress to worry about this situation. They believe that the US Congress should not get involved in commercial transactions.

According to insiders, the behavior of the above-mentioned members of congress is unlikely to trigger any legislation measures. At the same time, the number of the congressmen who signed the letter is not large enough to form a voting group with sufficient votes to pass any bills through the US House of Representatives.

According to a 1988 US law, the US president has the right to veto such transactions if the Committee on Foreign Investment in the United States proves with evidence that a foreign company buying an American company poses risks to US national security.

By People's Daily Online