Why Is America Worried? CNOOC will be good for Unocal's shareholders--and for U.S. oil and jobs.

Opinion Journal ^ | July 6, 2005 | FU CHENGYU

[Kaslin]

Two weeks ago, our company, CNOOC Ltd., extended a friendly, all-cash offer to Unocal's board of directors. After being invited to engage in dialogue with Unocal earlier this year, we entered detailed negotiations regarding a possible merger. We have made our offer because Unocal's asset base fits our business extremely well--70% of its oil and gas reserves are close to Asian markets where we operate. We are listed on the New York and Hong Kong stock exchanges and have fiduciary obligations to all of our shareholders. We believe this merger will offer our shareholders, which include many leading U.S. institutional investors, tremendous growth opportunities.

The majority of Unocal's Asian reserves are gas. Its proven reserves are mostly committed to long-term contracts in the region, notably for domestic gas markets in Thailand and Bangladesh. Unocal also has very substantial gas resources--or unbooked reserves--particularly offshore East Kalimantan, Indonesia, which will be developed for the production of liquefied natural gas (LNG). Although CNOOC will have no direct influence over the marketing of the LNG, since this is conducted by Indonesian state-owned entities, it is expected that the clean-burning LNG will be sold primarily into Asian markets.

We also believe that our two companies can bring even more oil and gas to the U.S. market by building on Unocal's strength in the Gulf of Mexico and other producing areas in the U.S. Last year, CNOOC grew production of oil and gas by over 7%. Over the past three years, we achieved an average reserve replacement ratio of about 213%, one of the best records in the industry.

[rbg81]

I'm sure there are lots of Americans who would have written the same piece. Its all a question of $$$.

[HAL9000]

To the author - FU CHENGYU too.

[quantfive]

We see for our own eyes what happens when you allow your most strategic energy commodities to be controlled by foreigners. Our country does not intend to repeat these same mistakes with coal or gas as we did with oil.

[TXBSAFH]

This is a bad idea for this whole country. And this country is what I care about.

[Colorado Doug]

building on Unocal's strength in the Gulf of Mexico and other producing areas in the U.S.

Oh, I get it now.

[sefarkas]

...but I'm suspicious of the motives of the author with a name like, FU CHENGYU.

If you read the op-ed in the WSJ you will see at the end that Mr. Fu is chairman and CEO of CNOOC Ltd. Your remark appears somewhat bigoted.

[Wiz]

Chicom propaganda, I think China hired some journalists to write something that will lead the public oppinion in their own way. China has done this since World War II, and that also includes targeting the Western countries. Don't get brainwashed and be careful about journalists and writers that may be hired and writing an article favoring China.

[Kaslin]

Anything from China is bad

[TXBSAFH]

Agreed.

[longtermmemmory]

We come to serve mankind...

[Donna Lee Nardo]

"...I'm suspicious of the motives of the author with a name like, FU CHENGYU."

Me, too. But I must say I am relieved to see it wasn't written by Henry Kissinger or another well-connected friend/lobbyist for Red China......

[steveegg]

Why am I worried about the ChiComs buying Unocal? Let me count the ways...

1. Onocal has the rights to much of the oil in the Gulf of Mexico. Much of what we produce on our own for the cost of production comes from there (and the cost of production in the Gulf is cheap compared to Alaskan oil).
2. CNOOC is owned and controlled by a government that alternately views the United States as a hostile enemy. That same government that wants total control of Unocal refuses to let any foreign entity hold a majority stake in any joint ventures in Red China.

Care to guess what would happen to those Gulf oil wells if we honor our committment to Taiwan when the ChiComs move on them (or, perhaps when the ChiComs finally make a play for the Spratly Islands oil, or maybe if Krazy Kim is crazy enough to restart the Korean War)?

[CodeRouge]

FU CHENGYU's little bio:

born 1952

education: China Northeast Petroleum Institute (no degree granted)

           M.S. University of Southern Carolina, 1986

Party affiliation: Chinese Communist Party (CCP)

Current position: CEO, CNOOC (appointed by CCP)

Other positions: CCP ideology department, CNOOC branch.

                 Chief of discipline and inspection of CCP, in CNOOC group

[CodeRouge]

CNOOC is owned and controlled by a government that alternately views the United States as a hostile enemy. That same government that wants total control of Unocal refuses to let any foreign entity hold a majority stake in any joint ventures in Red China.

Update: That same government now vows to use nuclear weapon against US to counter US's conventional weaponry. Later the ChiCom government refused to retract the statement:

http://www.freerepublic.com/focus/f-news/1444082/posts

[Kaslin]

Update: That same government now vows to use nuclear weapon against US to counter US's conventional weaponry. Later the ChiCom government refused to retract the statement:

Actually it was a Chinese General who did, but neverthe less it is still dangerous

[steveegg]

Not to mention that PLA generals, including this clown, threatened to nuke us in the past. The only difference this time is that they said it directly to reporters instead of ex-Clintonista officials.