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US Government Officials attempt to stop Unocal - CNOOC
merger
July
16th, 2005
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Unocal Logo |
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The Senate is trying to stop the
purchase of Unocal from a China oil company. The China government
owns 70% of Chinese National Offshore Oil Co. (CNOOC ) which is
China’s third largest oil company. CNOOC is seeking to buy
California Unocal Corporation for $18.5 billion.
There is great concern that the
merger of companies is possibly an issue of national security. On
Friday, Senator Byron Dorgan, D-N.D., submitted a bill to the Senate
that will bar the CNOOC from buying Unocal. Two days before this,
Representative Richard Pombo R-Tracy, said that he plans on
introducing an amendment to the House’s Energy Policy Act of 2005 to
scrutinize Chinese policies.
Unocal’s board met this past
Friday and has not yet accepted the offer, as they may want for more
cash. CNOOC is still ready to negotiate with Unocal even with the
decline of the $18.5 billion offer.
"This really isn't very
complicated,'' Dorgan stated. “Unocal is located in the United
States and has approximately 1.75 billion barrels of oil. It would
be foolish, to say the least, to allow a foreign government ... to
own that much of such a strategic resource so vital to the U.S.
economy and the national defense.''
CNOOC says that about 70 percent
of Unocal’s current oil and gas supplies are in Asia and the Caspian
Sea area. They believe that the merger would create a lead position
for the Asian market.
The committee on Foreign
Investment in the United States (CFIUS) is made up of 12 government
officials that must investigate and approve business deals which
could affect national security. The CFIUS was started in 1975 by
Gerald Ford. CNOOC has request approval back on July 1st
from the CFIUS committee. The CFIUS will report to the President,
who will then inform Congress of the decision. The process by law
must be completed in 90 days.
Related stories:
Unocal
may be split up by takeover deal
By
Nicole Wilson
Best Syndication Staff Writer
Keywords and Misspellings: CNOC Unical
murger stock investor invest merge CNOCC |
