CNOOC Likely to Drop Unocal Bid
After Unocal passed up CNOOC's $18.5 billion offer in favor of a $17.1 billion cash-and-stock offer from Chevron, analysts believe that CNOOC might abandon its effort to acquire the company.
While I'm almost always in favor of free markets, this is one case where I have serious reservations. To take the example to an extreme, I definitely would not allow a communist government acquire all U.S. oil companies as a matter of national security. And while Unocal is only one company, China's stated goal is to acquire "oil assets" for security purposes. We know from history that OPEC can place an embargo on countries, which would cripple a country's economy without an alternative. The U.S. needs to be sure it's never put in that situation.
*Update*
On another note, CNBC just reported that China is de-pegging (read: devaluing) its currency from the U.S. dollar, which essentially reduces the value of the yuan by 2.1%.
While I'm almost always in favor of free markets, this is one case where I have serious reservations. To take the example to an extreme, I definitely would not allow a communist government acquire all U.S. oil companies as a matter of national security. And while Unocal is only one company, China's stated goal is to acquire "oil assets" for security purposes. We know from history that OPEC can place an embargo on countries, which would cripple a country's economy without an alternative. The U.S. needs to be sure it's never put in that situation.
*Update*
On another note, CNBC just reported that China is de-pegging (read: devaluing) its currency from the U.S. dollar, which essentially reduces the value of the yuan by 2.1%.
posted by Richie Rich | 7:27 AM
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