The Chinese oil company fighting for control of Unocal said Friday that it had asked a top government panel in the US to formally review its US$18.5 billion takeover offer, even as political opposition to the bid was growing in Washington.
The Chinese company, China National Offshore Oil Corp Ltd (CNOOC, 中國海洋石油), said it had filed a notice with the Treasury Department's Committee on Foreign Investments in the US to look into the proposed acquisition and requested that the review be conducted "in an expeditious manner."
The recent bid by CNOOC topped an offer of US$16.8 billion made in April by Chevron, but threatens to be derailed by US lawmakers opposed to oil and gas assets being snapped up by a Chinese company.
CNOOC is racing against an Aug. 10 deadline, when Unocal shareholders get to vote on the Chevron offer. CNOOC hopes that by pressing for a quick review by the government it can assuage concerns that the takeover will drag on for months and persuade Unocal shareholders to turn down Chevron's bid. While CNOOC and Unocal's management are currently in talks, Unocal's board is still recommending Chevron's offer to its shareholders.
"It's a political decision for CNOOC to file for review," said Nancy McLernon, the deputy director of the Organization for International Investment, a business association that represents US subsidiaries of foreign companies, but does not represent CNOOC.
"They want the clock to start as soon as possible and are actually responding to the concerns on Capitol Hill. This is not typically done in M&A activities," she said.
Separately Friday, the chairman of the House Energy and Commerce Committee, Representative Joe Barton of Texas said he would hold a hearing on CNOOC's bid after Congress returns from the Independence Day recess.
His comments came a day after Representative Carolyn Cheeks Kilpatrick of Michigan won passage of an amendment to the annual appropriations bill that would prevent the Committee on Foreign Investments from reviewing the bid.
That committee, headed by the secretary of the Treasury, looks at foreign acquisitions that have national security implications for the US and can make a recommendation to the president to block the purchase. Since 1988, 1,500 cases were filed, but only one was blocked on national security grounds -- the 1990 sale of a Seattle-based airplane parts maker, Mamco Manufacturing, to a military-related agency of the Chinese government.
CNOOC said Friday that "once all the facts are known and the commercial purpose and terms of the transaction are fully understood, many initial misimpressions will be corrected, and many doubts and questions will be favorably resolved."