CNOOC controversy continues

Washington is not the only place where China National Offshore Oil Corporation’s bid to purchase California-based Unocal.

Although some experts in China believe the bid is an admirable attempt to try to secure supplies for China’s future energy needs, others see the proposed takeover as saddling CNOOC with entirely too much debt in the event that oil prices fall in the future.

Meanwhile, the controversy in the United States continues as CNOOC has asked for an immediate review of the bid by the Committee on Foreign Investments in the US, the body that vets purchases of US companies by foreign groups.

This request is seen in some quarters not only as an attempt by CNOOC to prove that its bid is a commercial venture and not a move by the Chinese government, which owns the oil company, to acquire strategic reserves of oil and technology with military applications, but also as a way to get the government to review the deal before Congress prevents it.

The request comes as preliminary votes have already been taken on two measures, one of which would deny the use of federal funds to recommend the bid and the other which seeks to prevent President George W. Bush from reviewing the bid unless Unocal first accepts CNOOC’s bid.