* Sen. Schumer: inter-agency committee should block
* Pelosi wants committee to 'thoroughly review' China
* Republicans say U.S. should drill more oil, approve
* CNOOC has asked for US review - source
By Roberta Rampton
WASHINGTON, July 26 The U.S. government should
block a bid by China's state oil company CNOOC for
Canadian oil company Nexen until China's government
provides fair access for U.S. companies that want to invest in
China, a top Democratic senator plans to tell Treasury Secretary
Timothy Geithner on Friday.
In a draft letter obtained by Reuters, Charles Schumer, the
Senate's No. 3 Democrat and a frequent critic of China's trade
and currency policy, said the powerful Committee on Foreign
Investment in the United States (CFIUS) should not approve the
deal until China makes "tangible, enforceable commitments" on
market access for U.S. companies.
The U.S. inter-agency committee reviews foreign takeovers of
U.S. assets for national security concerns. About 10 percent of
Nexen's assets are in the United States, where it has oil
drilling operations in the Gulf of Mexico.
CNOOC asked for a voluntary review by CFIUS on July 23, the
same day it revealed its bid for the Canadian company, but the
start date for the review is undetermined, a source close to the
Chinese firm told Reuters.
The source declined to speculate on the outcome of the
Schumer's draft letter is the strongest statement yet by a
U.S. political leader against the $15.1 billion deal, which is
the biggest foreign acquisition for a Chinese company, and which
would give China a significant foothold in North America's oil
Schumer said he believes the proposed deal would benefit the
United States and its energy sector, but said Geithner should
"not miss this opportunity" to ensure China lives up to promises
it has made to provide fair access for U.S. companies into
"I respectfully urge you, in your capacity as chairman of
the Committee on Foreign Investment in the United States
(CFIUS), to withhold approval of this transaction to ensure U.S.
companies reciprocal treatment," Schumer said in the draft
The Democratic leader in the U.S. House of Representatives,
Nancy Pelosi, also called for the committee to "thoroughly
review" the CNOOC takeover.
"This deal prompts great concern about the Chinese
government's continued attempts to use its state-owned
enterprises to acquire global energy resources," Pelosi
spokesman Drew Hamill said in a statement.
A Treasury Department spokeswoman did not immediately
respond to a request for comment. The department typically does
not confirm or discuss reviews by CFIUS.
The CNOOC source declined to comment on how the Chinese
company would address congressional concerns about the deal.
REPUBLICANS BLAME OBAMA
Republicans in Congress have also expressed concern about
the deal, although they stopped short of saying that the U.S.
government should intervene.
"I'm concerned because it's really a trend, particularly in
the Gulf of Mexico," Louisiana Senator David Vitter said. "I
don't know enough about it to know whether it should be blocked
through any American, U.S.-based law. But I do think the far
better alternative is for us to play offense, and for us to be
developing, taking advantage of these energy resources," Vitter,
a Republican, told Reuters.
Vitter and other Republicans have blamed President Barack
Obama's delay in approving the Canada-to0Texas Keystone XL
pipeline for pushing Canada's government to more aggressively
explore oil deals with China.
Obama has said a portion of the pipeline going through
Nebraska needed more environmental review after the route was
adjusted to avoid an ecologically sensitive area.
Senator John Hoeven, whose home state of North Dakota has
become the nation's second-largest oil producer, said the United
States should do more to develop its resources.
"Do we really want to be buying our oil or Canadian oil back
from the Chinese? If we don't take action to develop our
resources and work with our closest friend and ally Canada,
that's exactly what's going to happen," Hoeven said at a news
Hoeven and other Republicans said China's plan to invest in
North American oil production shows the U.S. government needs a
more aggressive energy policy. They unveiled a package of
proposals that would allow for more drilling on government-owned
land, reduce regulations, streamline drilling permits, and
approve TransCanada's Keystone project.