BEIJING (Agence France-Presse) — Chinese officials yesterday angrily responded to a vote by U.S. lawmakers urging the Bush administration to block the $18.5 billion bid by China National Offshore Oil Corp. (CNOOC) to buy U.S. oil company Unocal Corp.
“We demand that the U.S. Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries,” China’s Foreign Ministry said.
“CNOOC’s bid to take over the U.S. Unocal company is a normal commercial activity between enterprises and should not fall victim to political interference,” it said.
“The development of economic and trade cooperation between China and the United States conforms to the interests of both sides.”
On Thursday, the House voted 398-15 for the nonbinding resolution that calls on the U.S. government to block the Unocal bid.
A purchase by a Chinese state-run company “would threaten to impair the national security of the United States,” the resolution said.
“The Chinese government’s control of CNOOC made the bid possible, not the free market,” House Minority Leader Nancy Pelosi, California Democrat, said before the vote.
“We cannot, in my opinion, afford to have a major U.S. energy supplier controlled by the communist Chinese,” said Rep. William J. Jefferson, Louisiana Democrat.
CNOOC on Friday asked the Committee on Foreign Investment in the United States (CFIUS) to review the acquisition plan in an effort to clear up doubts over the bid and get the regulatory process rolling before Unocal’s board of directors votes on the bid in late August.
“It’s a voluntary notice from CNOOC Ltd. We hope the review will enter formal proceedings as soon as possible as we are sure that the transaction is purely commercial,” CNOOC spokesman Yang Hua said.
CNOOC, China’s third-largest oil and gas producer, announced its bid on June 23, trumping a bid by Chevron by about $1.5 billion.
Unocal’s board of directors has voiced preference for the Chevron bid despite CNOOC’s better cash offer and a pledge not to lay off Unocal’s workers.
CFIUS has barred one transaction out of the more than 1,500 it has examined since 1988. It blocked a Chinese company from taking over a U.S. firm.
CFIUS was created to monitor foreign investment activity in the United States with an eye toward protecting national security.
Led by Treasury Secretary John W. Snow, the committee’s 12 members include the secretaries of state, defense and commerce, the attorney general, the director of the Office of Management and Budget, the U.S. trade representative, and the chairman of the Council of Economic Advisers, a Treasury Department Web site said.
“Basically, for me this is a routine commercial activity, but any time something like this happens in a sensitive industry like oil, you are going to get a lot of political interference,” said Dong Tao, an analyst with Credit Suisse First Boston in Hong Kong.
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