Hu Shuli: CNOOC, Unocal and the ‘Go-Out Strategy’
The unsolicited $18.5 billion bid by China National Offshore Oil Corporation (CNOOC) for California-based Unocal has become much more than a mere international merger proposal. It has spawned an intensifying international controversy. Although the result of the bid is still pending, the controversy itself forces us to reflect seriously on the energy strategies of both China and the United States, including their prospects of energy cooperation in the future. The time to do so is now.
If both countries prioritize competition over oil, there is a high chance their energy strategies will be dominated by “zero sum” in the future. The successive waves of the recent controversy gives us just a sense of the potential clashes that could arise from the incompatible strategies of the two countries. Global oil prices surged past the $60 threshold around the time of CNOOC’s offer, which further fueled already-existing U.S. anxieties over a potential energy crisis. And there is a tangible sentiment that China is to blame for the spike in prices.