The U.S. government should block a bid by China’s state oil company CNOOC for Canadian oil company Nexen until China’s government provides fair access for U.S. companies that want to invest in China, a top Democratic senator plans to tell Treasury Secretary Timothy Geithner on Friday.
In a draft letter obtained by Reuters, Charles Schumer, the Senate’s No. 3 Democrat and a frequent critic of China’s trade and currency policy, said the powerful Committee on Foreign Investment in the United States (CFIUS) should not approve the deal until China makes “tangible, enforceable commitments” on market access for U.S. companies.
The U.S. inter-agency committee reviews foreign takeovers of U.S. assets for national security concerns. About 10 percent of Nexen’s assets are in the United States, where it has oil drilling operations in the Gulf of Mexico.
CNOOC asked for a voluntary review by CFIUS on July 23, the same day it revealed its bid for the Canadian company, but the start date for the review is undetermined, a source close to the Chinese firm told Reuters.
The source declined to speculate on the outcome of the review.
Schumer’s draft letter is the strongest statement yet by a U.S. political leader against the $15.1 billion deal, which is the biggest foreign acquisition for a Chinese company, and which would give China a significant foothold in North America’s oil assets.