The first thing I thought when I heard about the Chinese government's effort to acquire Unocal was that British Petroleum held the role of business terra firma on the American soil of Alaska for a long time before getting out in 1989. They have pretty much dominated the supply there, though their ability to distribute is controlled by the country's possession of the Alaskan pipelne and the land.
My second thought was about America's strong lobbying efforts to open up the oil industry in other countries — most especially Russia — so the United States can buy companies or oil fields there. A 2004 speech from Ali Moshiri, managing director, ChevronTexaco Latin America (while shockingly absent any talk of conservation), brings out a plan for pushing into other countries, and some of the difficulties his company has had doing so.
With those two thoughts leading this week's reading research project I sought more information, gathering together what I've heard, read and seen just over the last couple of days.
Even after reading that the country's ninth-biggest oil company, Unocal accounts for less than 6 percent of American production and that its major asset is natural gas and oil just off-shore of Indonesia, my squirrelly gut reaction is the same. The Unocal purchase by China National Offshore Oil Corp., the third largest oil company in China (and 70-percent Chines-government owned), is part of a strategy that "Big Red" has been pursing in recent months and years to shore up its own supply.
Chevron had been the favorite in the rush to buy Unocal but why is it up for sale anyway? Isn't that a question worth asking as well? I could not find the answer online.
According to a 2003 Unocal Prospectus (PDF) seven of nine members of the Unocal voting Board of Directors are Malaysian.
Timothy Ling was Unocal chairman from 2002 to 2004 when he died of a heart attack following a workout.
Can it be a coincidence that this great push comes at a time when the President of China is, himself, an oilman, of sorts. President Hu Jintao holds a master's degree in petroleum engineering from the University of Southern California. (Source)
Article comments
1 - Aaman
Nice, so globalization only works when it's fair to the West? Think again - money talks.
Furthermore, I have a feeling that Chevron isn't too interested in closing this deal - they've got a lot on their plate already.
2 - Bryan McKay
With all this talk about "reds," it makes me feel like Joe McCarthy has come back from the dead and is posting on Blogcritics in the guise of Temple Stark.
And Aaman, nice point. Americans have always thought in terms of their global interests first. If China wants to buy an oil company, it becomes a threat to national security; when America does it, it's considered good business.
3 - Temple Stark
I didn't say my gut reaction was the correct one; just that that's what it was. My point two addresses that same thing - we've been lobbying to open up markets for American business so it's a little awkward, to the say the least, to now say China can't get into ours.
See ... I'm ahead of you. Either or that or I'm so far behind you're lapping me.
4 - Aaman
Temple, you know it's all about the lede and the headline:)
5 - Bryan McKay
Interesting, btw, that you mentioned the IBM takeover in your post. There's a bit about it in the new issue of Wired. Haven't read it yet, but I was thinking about it when I saw the title of your post.
Also interesting is that "red China" seems to be growing more and more capitalist each day. It's getting to be more and more impossible to maintain a self-producing economy in this age of globalization. With the new CAFTA, it looks like we're heading irreversibly further in this direction.
6 - Temple Stark
CAFTA pretty much snuck in there, didn't it?. Nothing compared to the battle over NAFTA.
7 - gypsyman
Just a quick note about Canada being one of the U.S. s bigest supliers of crude. China is attempting to buy up a huge interest in the Alberta Tar sands project which is going to be responsible for the production of a majority of our oil in the future.
gypsyman