Neither China nor CNOOC are in this acquisition game for Unocal just for capitalist sport. On behalf of the government of China, CNOOC is acquiring energy reserves.
Contrary to the expectations of many pundits and policymakers in the United States, China is not "going Japanese" and using its surplus dollars to buy up expensive artwork or signature properties like Rockefeller Center or Pebble Beach Golf Course. It was one thing when the Japanese bought the fancy golf course or the architecturally significant landmark office building in New York. Those assets are still here in the United States and, at the end of the day, are still available for U.S. citizens to use.
But in this Unocal case, Chinese interests are attempting to buy a U.S. industrial legacy with oil and minerals in the ground in North America and overseas. There is a qualitative difference here, with long-term implications for U.S. national strategic interests.
--Byron W. King
Thanks for the ping.
Lets reduce concepts down to basic definitions..according to some conventional wisdom....
If I make money...its 'capitalism'...period.
Everybody STFU and dont ask no questions...
America supports Chevron, show your patriotism by supporting Chevron and resist the Communists from threatening our country.
1. Two perspectives here: It doesn't really matter who owns the crude. The crude still flows on to the world market. If China ships Unocal crude to China, it just means they buy less elsewhere. 70% of Unocal reserves are in Asia and never would have been sold in North America anyway. Also, its not like if we went to war with China that we wouldn't take the 30% of reserves that are in the US anyway. There are other US companies with operations offshore China, that oil is sold to China, not to North America.
2. It is true that it is the zero interest loans that are making the acquisition possible. What this means is that CNOC is not factoring in the true cost of capital into their analysis, and are therefore willing to overpay. There is nothing wrong with US companies selling assets to people who are overpaying for them. What it means is a net windfall for the US company at the expense of the Chinese government/ taxpayers.
If UNOCAl had any significant US oil supply, it would not be the object of a take over with crude oil at record prices.