[Congressional Record (Bound Edition), Volume 151 (2005), Part 14]
[Senate]
[Pages 19179-19180]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 CNOOC

  Mr. BAYH. Mr. President, great concern has been raised by this 
Senator, and others, in recent weeks regarding efforts by the China 
National Offshore Oil Corporation, known as CNOOC, to acquire the 
prominent U.S. oil company, Unocal, based in California. The Unocal 
Board has endorsed a takeover bid by Chevron, also a California 
company, which its shareholders will vote on in the coming days.
  This Senate needs to be aware, however, that CNOOC, which is 
essentially an arm of the Chinese government, may well be planning to 
raise its bid to acquire Unocal, and what greatly disturbs this Senator 
are reports in the press that they are waiting for Congress to adjourn 
for August before making a renewed bid--a move that directly challenges 
the Congress and the authority granted to it by the Constitution to 
regulate foreign commerce.

[[Page 19180]]

  Moreover, this renewed bid heightens my concerns about the heavily 
subsidized nature of CNOOC's financing. When foreign firms compete for 
assets in the U.S., it is essential that they do so on a level playing 
field with U.S. companies. Government subsidies tilt this playing 
field, and in doing so distort competition. This harms U.S. workers, 
companies and investors.
  Congress recently approved an amendment to the Energy Policy Act that 
requires the Administration to study these issues and report to 
Congress and the President. This amendment reflects Congress' strong 
reservations about the PRC's role in financing the acquisition of U.S. 
energy assets, and about CNOOC bid for Unocal in particular.
  CNOOC's decision to increase its bid would heighten my concerns about 
CNOOC's efforts. If anything, it reinforces my belief that subsidies of 
this sort raise serious economic policy concerns and leave U.S. firms 
at an unfair competitive disadvantage. You can be sure that I will not 
be alone amongst my colleagues, in the Senate and in the House, who 
will be paying attention to what happens in the coming days, and if 
need be, will be prepared to act when Congress returns in September.

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