(EnergyAsia, June 29) — The New York-based Eurasia consulting group said that US conservatives led by Vice President Dick Cheney is working to thwart China’s CNOOC in its attempt to buy over US independent energy company Unocal.
In a brief comment, Eurasia said: “Hawks in President George W. Bush’s administration Ð particularly in Vice President Dick Cheney’s office Ð vehemently oppose the takeover bid.
“They are, however, hesitant to say so publicly given their own close ties to US oil firms and the weak prima facie evidence that the deal presents a threat to US national security. For the moment, therefore, they are making their case through proxies.
“Although it is too early to predict the outcome of the struggle over Unocal, a key political variable is how broadly the CFIUS defines threats to national security and some opponents have argued that the Chinese government’s backing elevates the bid to a national competition for energy security.
(The CFIUS stands for the Treasury Department’s Committee on Foreign Investments in the US).
“The credible threat of a US government block may be sufficient for Unocal’s shareholders to accept Chevron Corp.’s takeover bid when they vote in August. The likely strategy of CNOOC’s opponents in Washington, therefore, will be to increase political uncertainty by escalating rhetorical opposition and delaying CFIUS’s review of CNOOC’s bid.’
CNOOC has launched an unsolicited US$18.5 billion offer to buy over Unocal, trumping Chevron’s US$16.4 billion offer.
Eurasia Group is a research and consulting firm that focuses on global political risk and emerging market country analysis, serving major financial institutions, multinational corporations and governments. Founded in 1998, Eurasia Group has a full-time staff of 55, a global network of more than 480 in-country experts and partners covering more than 65 countries. Eurasia Group is headquartered in New York, with offices in Washington, DC and London.