BEIJING — As Fu Chengyu sees it, the political maelstrom brewing in Washington over his Chinese oil company's bid to buy Unocal Corp. stems from a misunderstanding of global oil markets and the deep reforms that have taken place in China over the last two decades.
The chief executive of CNOOC Ltd. said those opposing the $18.5-billion offer because of national security concerns might simply be "scared and surprised" by China's rapid rise in the world.
"The Chinese people and government are learning from the U.S. We are adopting the free-trade system very quickly, even though it's not perfect," Fu said Friday in an interview, speaking in English. He cited his company as an example: "We are using U.S. bankers, advisors, exactly meeting the processes of U.S. market requirements" for mergers and acquisitions.
If CNOOC's bid for Unocal is thwarted by politicians, Fu says, it will send a powerful message to the Chinese and the rest of the world. "Suddenly, [it would be as if] we found out that our teachers [of free trade] said that what they told us was not workable."
He said China would not hoard Unocal's reserves of oil and natural gas because doing so would require shipping them long distances, at high cost, or breaking long-term contracts.
Fu's comments came shortly after the U.S. House of Representatives passed two measures late Thursday, Washington time, aimed at blocking CNOOC's proposed takeover of El Segundo-based Unocal. One was a resolution expressing concern that such an acquisition could harm U.S. national security. The other, an amendment to an appropriations bill, seeks to prevent the Bush administration from using federal funds to approve the Chinese bid, which topped a $16.5-billion offer made by Chevron Corp. in April.
Other Chinese have raised the specter of a backlash if CNOOC's bid is derailed by politics. "The consequence will be all the other Chinese companies will despise the Western game rules," said Han Xiaoping, general manager of Falcon Power Ltd., a consulting firm in Beijing.
CNOOC said Friday that it had filed papers with the Committee on Foreign Investment in the United States, a multiagency group led by Treasury Secretary John W. Snow that examines proposed deals by foreign entities from a national security point of view. CNOOC is seeking an expeditious review. Unocal shareholders are set to vote Aug. 10 on Chevron's bid.
