Washington (Platts)--11Jul2007

The US House Wednesday passed by an overwhelming vote of 370-45 a bill
that could block internationally based companies from acquiring US oil
companies, electric utilities and other energy-related entities.

     The legislation, identical to a bill passed by the Senate in late June,
is now poised to move to US President George Bush for his approval.

     The bill revises the structure and function of an interagency commission
called the Committee on Foreign Investment in the United States, which was
established in 1975 to ensure that national security is not compromised when
companies with ties to other governments buy US companies. 

     The House unanimously passed a slightly different CFIUS measure in
February, but adopted a slightly less stringent Senate version in order to
streamline the process and allow the bill to move quickly to the president,
who is expected to sign it into law.

     In 2005, CFIUS came under heavy fire from US lawmakers when the China
National Offshore Oil Corp. attempted to buy Unocal, a Los Angeles-based oil
and natural gas company. Lawmakers said CFIUS should have done more to block
the deal, arguing that it would harm national security by giving China access
to the company's energy resources.  

     The CNOOC/Unocal ultimately fell through, with Unocal being purchased by
Chevron, but CFIUS was faulted again when a Dubai-based company won a contract
to manage several major US ports. That deal was also scuttled under pressure
from US lawmakers.

     The bill passed Wednesday makes the US Department of Energy Secretary a
member of CFIUS, which many lawmakers said could have discouraged CNOOC from
trying to acquire Unocal. The measure also would require CFIUS to consider the
energy-related implications of international investment in the US. 

     Specifically, CFIUS would have to analyze how international investment
could affect "the long-term projection of United States requirements for
sources of energy and other critical resources and material."

     Senate Majority Leader Harry Reid, Democrat-Nevada, praised the House's
action. "The Foreign Investment and National Security Act of 2007 will ensure
that as we encourage investment in America, those ventures do not compromise
our national security," he said in a statement. "Now that both houses of
Congress have passed this landmark legislation, we call on the President to
strengthen the national security reviews of foreign investments in our
country."

		--Cathy Landry, cathy_landry@platts.com