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US Government Officials attempt to stop Unocal - CNOOC merger

July 16th, 2005

CNOOC China merger continues with Unocal with US government wanting to stop transaction

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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 Chinaís 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 Houseís Energy Policy Act of 2005 to scrutinize Chinese policies. 

Unocalís 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. ďUnocal 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 Unocalís 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


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Copyright 2005 Best Syndication                                            Last Updated Saturday, July 10, 2010 09:46 PM