The Art of the Deal

So what makes the attempted Chinese acquisition of Unocal different from its bid for PetroKazakhstan?

The acquisitian of Unocal was portrayed as a national security threat to the United States:

Since the Chinese state-owned oil company CNOOC Ltd. offered to buy oil and gas company Unocal Corp. on Thursday, various news sources have been examining whether or not the deal would threaten US national security. "Congress was building pressure on the Bush administration to carefully examine the bid by CNOOC, which is 70 percent owned by the Chinese government," reports The Associated Press.

"Chinese bid for Unocal adds fuel to fire," reads a headline from Sunday's Washington Post.

In a report on National Public Radio's Morning Edition, Republican Illinois Congressman Donald Manzullo says he worries that the Chinese bid to buy Unocal could mean that China would keep the company's vast Asian oil reserves for itself, and not put the oil on the open market, thereby giving China an economic 'leg up.'

"The Unocal issue arises at a time of record oil prices, unease over China's $160 billion trade surplus with the United States and an appetite in Congress to punish China with tariffs unless it revalues its currency," reports Reuters.

"From the dusty plains of East Africa to the shores of the Caspian Sea, China is seeking to loosen the grip of the United States on world energy resources and secure the fuel it needs to keep its economy in overdrive," reports The New York Times...

Yet a similar deal for similar holdings in Afghanistan's neighber Kazakhstan doesn't raise a ripple of alarm?

Could it be because Kazakhstan is more strongly influenced by Russia than Afghanistan?

Or is it more because Unocal was the apple of Chevron's eye and both were under the financial umbrella of the Carlyle Group? And all historically heavily involved with Bush family finances and the War?

On the other hand, the Kazakhstan deal uses Carlyle-affiliated advisors on both sides of the fence:

Citigroup advised China National Petroleum on the deal while Goldman Sachs advised PetroKazakhstan. Citigroup has agreed to provide the Chinese company with a letter of credit for the entire value of the deal; the state-owned Chinese oil company will not borrow any money from other Chinese government agencies.

It's good to keep it all in the Family.