CNOOC’s bid for Unocal triggers angry outbursts in the US |
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Mon, 04 Jul 2005 04:05
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The $18.5 billion bid for Unocal by the China National Offshore Oil Corporation, CNOOC, has triggered off mass hysteria in the United States with the US House of Representatives voting to block the backing of the bid by the government.
However, this move needs approval by the Senate, which has so far refused to consider any such proposal. It has been quite a couple of weeks in the county's energy circles after CNOOC put in an unsolicited bid for Unocal. This $18.5 billion bid was in cash and was well over the $16.3 billion cash and stock offer from US oil group Chevron Corp. The US government has given the go-ahead to Chevron, prompting CNOOC to ask a government panel to formally review its takeover offer.
The fears regarding the takeover by CNOOC stem from the fact that China requires a huge amount of energy to fuel its economic growth. US lawmakers fear that if the Unocal bid was accepted. China would disrupt supplies to the US in order to feed its own requirements. However, CNOOC has denied these claims and has said that once all the details of the transaction are made public, "many initial misimpressions will be corrected, and many doubts and questions will be favorably resolved."
However, not everyone is easily placated, Peter Morici, professor of business at the University of Maryland, feels that this takeover will allow China to become a major player in the geopolitical arena, "Coupled with their military buildup and authoritarian systems, China becomes a threat.
There's enough to block it on national security grounds," he observed. But Daniel Griswold of the Cato Institute's Center for Trade Policy Studies contradicted Morici's views and said that there were no security implications at all, "UNOCAL's energy assets are a couple of drops in the bucket of global energy," he said.
But nobody knows which way the shareholders will choose to go. The deadline for voting on the Chevron bid is August 10, 2005.
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