Unocal Deal: A Lot More Than Money Is at Issue - New York Times

Unocal Deal: A Lot More Than Money Is at Issue - New York Times:

"Unocal said that it had received permission from Chevron to hold discussions with CNOOC (China).

The question is how - if Unocal decides to switch from Chevron to CNOOC - the politics will play out in Washington, where critics are already speaking out and where the deal would be subject to approval by the Committee on Foreign Investments in the United States. The panel, a federal multiagency group, can prevent any foreign investment on the grounds of national security.

For years, the government has placed restrictions on the extent of foreign ownership in a variety of industries, from airlines to the media to military contractors. In the past, these restrictions have mostly affected developed countries like Japan and Britain.

'This is a remarkable arrival of China into the world of global big business deals and international investing,' said Clyde V. Prestowitz Jr., a former trade negotiator in the Reagan administration and president of the Economic Strategy Institute in Washington. 'And it does raise the issue of whether this gives influence or some kind of potential importance to a government that may not always be friendly to us.'

In Washington, CNOOC is already laying the groundwork. It has hired Public Strategies, a public relations firm whose vice chairman, Mark McKinnon, led President Bush's media campaign in the 2004 election. The company has also lined up some of the nation's savviest financial advisers - among them Goldman Sachs and J. P. Morgan - as well as such well-connected legal and lobbying firms as Akin Gump Strauss Hauer & Feld and Davis Polk & Wardell."