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Friday, June 24, 2005

Living on a Chinese Rock?

Well I'm semi-settled again, catching brief glimses of television, just enough to know that I must be missing much more in blogtopia. Did see the Spurs beat the Pistons, Ted Kennedy whip Donald Rumsfeld, and Ron Reagan deliver a long-overdue smackdown to Monica Crowley this morning, telling her that unlike George Bush, neither Richard Nixon nor his father ever deceived the American people to lead them into war. Monica damn near fell off her Nurse Ratched stool. Ron should be on the lookout for sharp objects in the near future.

Michael Duran sent me an article on the Chinese bid for Unocal:
But even before the communist nation formally announced a rival to Chevron Corp.'s $16.6 billion offer, reports that the bid was in the works prompted members of Congress to send President Bush a letter last week warning him of the threats posed by China's "pursuit of world energy resources."

"Such an acquisition raises many concerns about U.S. jobs, energy production and energy security," Rep. Richard W. Pombo (R-Calif.) and Rep. Duncan Hunter (R-Calif.) said in their letter.


CNOOC said the acquisition would more than double its production and estimated that 85 percent of the combined reserves of both companies are located in Asia and the Caspian Sea region.

Indeed, China's hunger for the oil and natural gas needed to fuel its economic expansion will likely result in huge investments to expand the combined company's production around the globe, which will help alleviate existing supply constraints that have helped push prices to $60 a barrel, analysts said.

"Anyone willing to invest in finding supply is doing the world a favor," said Goldstein.
It seems to be making politicans nervous and oil analysts happy. As someone who is pretty firmly convinced that the war in Iraq was launched (among other things) as a pre-emptive move to secure oil for the US as China's demands increase, it will be interesting to see how the administration responds. I haven't been able to spend enough time reading up on the matter to weigh all the pros and cons, so I'll throw it out there -- what do you think? Is it only fair that the sale be allowed, a small acquisition of no import, or is it a strategic move in a looming battle of great political significance?