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Imran Siddiqui
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The Potterverse
Jan 1970
time: 00:21
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From the London Times:
quote:
Analysis
America still sees reds under CNOOC's bed over Unocal bid
By Carl Mortished, International Business Editor
IT’S our oil, they think in Washington. How dare the Chinese try to take it from us.
No one has expressed it in quite those terms but the hostile bid for Unocal by CNOOC, the Chinese state oil company, is sending senators rushing to erect protectionist barriers.
Ron Wyden, a Democrat, called on John Snow, the Treasury Secretary, to conduct a thorough review of the attempted takeover under the Defense Production Act. “I don’t think being a free trader is synonymous with being a patsy,” he said.
Richard d’Amato, chairman of the US-China Economic and Security Review Commission, said: “This is not a free market deal, This is the Chinese Government acquiring energy resources.”
A review of the $18.5 billion (ÂŁ10.15 billion) bid on national security grounds now seems inevitable and a rattled CNOOC was yesterday making conciliatory noises, suggesting full cooperation with the review and a willingness to dispose of certain Unocal pipeline and storage assets.
That may not be enough to appease the US nationalists who in their protectionist frenzy are making the same mistake as the commissars in Beijing and the sheikhs of Araby. They are becoming oil hoarders.
In September last year, Lee Raymond, the chairman of ExxonMobil, told Opec member states to open up their economies to foreign investment. Invited to speak at a conference organised by the cartel, he said there was an urgent need for investment, because the world would need an extra 65 to 85 million barrels of oil per day by 2020.
The Exxon boss said: “The future need for petroleum energy will be such that restrictions in whatever form and wherever imposed [my italics], will jeopardise access to adequate energy supplies for world consumers.” Oil is fungible. It is the world’s most traded commodity and it moves to the highest bidder. Lee Raymond was objecting to the political exclusion of Western oil companies from Opec states which, since the 1960s, have imposed barriers of national sovereignty on their oil resources. It is a dangerous exclusion because the cushion of spare capacity that Opec once provided is almost vanished and the cartel lacks the investment clout to quickly replenish the lost potential.
Unocal is a bit of a red herring. It produces only 70,000 barrels per day in the United States, the majority of its production being in the Far East where it pumps large amounts of gas from beneath Thai and Burmese waters. It is Unocal’s Asian business that interests CNOOC, which has ambitions to expand its operations in the region. The Californian company’s Asian gas is sold locally and neither adds nor subtracts to American security by a single molecule of hydrocarbon energy.
But America continues to suffer from its post-9/11 insecurity and sees reds in the CNOOC bid. It is China’s urgent need for oil and gas that is driving up prices and the oil is going to China because demand is there, not because of a Communist plot. If the Chinese are prepared to invest $18 billion in making CNOOC a better oil company that is good for the world. A bigger and better CNOOC might find more oil in Asia and reduce the pressure on available supplies of crude, worldwide. That in turn would be good for America’s energy security.
Oil is fluid, dynamic, it moves under pressure. Lee Raymond knows it; he should tell those people in Washington. |
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25-06-2005 05:48
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Union Oil of California (Unocal) and Chevron-Texaco are both based in California so their merger would create a locally based industry titan. 
Smiley 
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