Friday, July 01, 2005

House chides China Oil Deal

In response by the Chinese Government-owned oil company's efforts to buy California oil gian Unocal, the U.S. House of Representatives is voicing its objection:

In a strong bipartisan vote of 333 to 92, the House approved an amendment to a Treasury Department spending bill forbidding the administration from using federal funds to approve the bid by CNOOC Ltd., an arm of government-owned China National Offshore Oil Corp., to buy Unocal for $18.5 billion.

The Treasury Department reviews proposals for significant foreign investment in U.S. companies to ensure that national security isn't damaged, a process that would involve use of federal funds. The review is conducted through the multi-agency Committee on Foreign Investment in the United States, which has seldom blocked foreign investments or mergers.

But more important than its specific terms, the amendment, sponsored by Rep. Carolyn C. Kilpatrick (D-Mich.), was a vehicle for expressing congressional displeasure at the proposal.

"Why do we want to sell our oil to a global economic competitor?" Kilpatrick said. "Americans deserve a thorough government evaluation of the implications of Unocal's takeover by one of our chief economic competitors."

Although the amendment was passed, it could be changed or removed when members of the House and the Senate meet to reconcile their versions of the legislation.

In a separate action, the House approved a resolution, in a late-night 398-15 vote, expressing the chamber's concern that the proposed buyout "could threaten to impair the national security of the United States" and asking the president to initiate a review if the companies proceed.