Others News
- U.S. urged to set clear policy on oil deals
Date: 13-Sep-2007 Sources: (Shenzhen Daily)
THE United States needs to set a clear policy on whether Chinese energy companies can acquire oil and gas assets in the United States, a senior Chinese energy official said yesterday.
'We have to have a transparent policy by the U.S. as to what can be purchased by Chinese companies,'said Chen Deming, vice chairman of the National Development and Reform Commission.
Chen said it was troubling for companies to go through all the commercial negotiations and then there's a requirement by the government to get approval.
Chen's comments are the latest example of lingering awkwardness from the Unocal controversy in 2005, when China National Offshore Oil Corp. withdrew a bid for the company because the prospect of the deal aroused ire in the U.S. Congress. Unocal was ultimately acquired by Chevron Corp.
U.S. President George W. Bush recently signed a law tightening the oversight of U.S. assets of foreign firms. The law singles out energy assets as being of particular strategic importance.
Chen, speaking through an interpreter, suggested U.S. oil and gas assets could theoretically be an appropriate investment vehicle for the Chinese firms, given China's trade surplus. But he said it isn't clear 'whether the United States is interested in Chinese companies?acquiring U.S. fields.
Chen's comments were made on the sidelines of a U.S.-China petroleum forum attended by senior government and industry officials from the two countries.
Asserting that foreign companies aren't being targeted by China's recent windfall tax law, Chen called for more cooperation between U.S. and Chinese energy companies, both in China and abroad.
The two countries have 'big cooperation potential?in oil and gas development, refining and chemicals, energy conservation, nuclear power and renewable energy, Chen said.
Chen urged U.S. oil majors to welcome their Chinese counterparts on overseas projects, saying the Chinese firms have concrete success, especially in onshore oil development.
In addition to advocating more cooperation overall, Chen used his speech to reassure U.S. firms about China's so-called 'windfall?profits tax, enacted in March 2006.
Chen said the tax doesn't target foreign companies, and that Chinese companies have accounted for 95 percent of the revenue collected so far.
'The government has fully factored foreign companies' reasonable profits when stipulating this tax,'Chen said.
ConocoPhillips, one of the largest foreign oil producers in China, has filed for international arbitration to protest the tax, according to people familiar with the situation.
ConocoPhillips' claim states that its previous agreement with its partner company, China National Offshore Oil Corp., protected it from later policy changes, they said.
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