The cash bid, largely backed by loans from CNOOC’s state-owned parent, represents a premium of about 10% to US oil company Chevron’s $16.4 billion cash-and-stock offer.
Snow is chairman of the Committee on Foreign Investments in the United States, or CFIUS, which is being urged by many lawmakers to scrutinize the CNOOC bid to make sure that it doesn’t threaten national security. Congressional critics argue that energy is a strategic resource and that Unocal’s seismic technology could be easily converted to military purposes.
Meanwhile, CFIUS also is charged with maintaining the credibility of the US open-investment policy and preserving the confidence of foreign investors in the US. The committee also seeks to assure that US investors abroad are not subject to retaliatory discrimination.
Earlier this year, CFIUS approved the purchase by China’s Lenovo Group of IBM’s personal-computer business, despite Congressional concerns that China one day could corner the PC market. As Global Finance went to press, Snow said it was too early to start a review of CNOOC’s bid for Unocal, but the White House promised an appropriate national and economic security review if the Chinese firm is the winning bidder.
For its part, China says the offer should be considered as a normal business deal without political interference.