Should Unocal sell to CNOOC?

Here we are. A country that claims to be striving towards being less dependent on foreign sources of energy and just over the horizon looms a deal to sell one of our MAJOR American Oil Companies to a company in a far from trusted competitor in the world market - China.

Should we worry?
All about Unocal. It's not just an Oil Company.
Trying to maintain good Foreign Relations is definitely a difficult necessity.
"President George W. Bush's initial response to the proposed takeover of a major American oil company by a Chinese rival has been to duck. It is not hard to see why. ...." continue reading "News Analysis: Chinese bid for Unocal puts Bush in hard spot" By Richard W. Stephenson The New York Times
Is the Administration caught between a rock and a hard place when it comes to China? Yes. It is bad enough that they don't play fair when it comes to Free Trade and the way they manipulate their currency. Now CNOOC has way overbid an American Company, Chevron, in the bid to purchase Unocal.
It is not just the problem of selling out part of our oil industry to a foreign competitor, it may also affect the negotiations with North Korea.
We want China to do certain things, like begin sanctions against N.Korea. Will part of this deal include allowing CNOOC to purchase Unocal?
(This company is supposed to be independent of the government. The Forbes article below will deal more with this.)
From BBC News:
"In an interview with the Reuters news agency, CNOOC chief executive and chairman Fu Chengyu said he was "quite confident" that his firm's offer would be accepted, adding that the move for Unocal was friendly.

"We believe the US government will approve the deal," he said.

The company's chief financial officer Yang Hua told Dow Jones Newswires that CNOOC is "prepared to closely cooperate to get US approval for this deal".

"We believe the offer will be very good for America as we are going to protect US jobs while continuously marketing [Unocal's] products in the US," Mr Yang was reported as saying."

Protect U.S. jobs? Can we really believe that?

Also from that article:
"The widespread assumption then was that CNOOC would keep hold of Unocal's Asian assets, and sell off the rest of the company."

Who? Who will end up with the assets that China is not interested in?

As of 9:23pm on 6/26/05 1 usd = 8.3 yuan according to where I found the following update:

'China's CNOOC to begin talks with Unocal; sparring begins over review - report'

"BEIJING (AFX) - CNOOC Ltd is set to begin talks with Unocal Corp on its landmark 18.5 bln usd unsolicited bid for the US energy group after Chevron Corp gave permission for the two to negotiate, the Financial Times reported.

The newspaper did not say when the talks will begin but it said the discussions will give CNOOC an understanding of how Unocal's board views the proposal, and what it would take for it to be declared 'superior'.

In Washington, a bi-partisan group of lawmakers has sent a letter to Treasury Secretary John Snow demanding that the potential deal be reviewed 'immediately' by the Committee on Foreign Investments in the US (CFIUS), a powerful inter-agency panel."

(several paragraphs)

"In a letter to Snow, 41 congressmen said the CFIUS review should examine whether the Chinese government was involved in financing the potential deal, whether investments by CNOOC were 'market-based' and free of subsidies and whether there were any 'technology transfer implications' that presented US national security concerns."

The currency issue should definitely play a part in any decision to sell to a Chinese company.
It mentions National Security risks based on technology, but what about the energy we need? What next? Give control of our Nuclear Plants to Iran because they are the highest bidder?

IMO, certain American businesses should never be controlled by foreign entities.
Soon we will all be employed and controlled by foreign (used to be American) companies.

Posted by Dawn at June 26, 2005 10:00 PM