Washington (Platts)--26Jul2007

US President George Bush Thursday signed into law a measure increasing
the scrutiny of deals involving foreign acquisitions of US companies and
assets, including oil companies, electric utilities and energy-related
entities.

     The Foreign Investment and National Security Act of 2007 passed both the
House and Senate in recent months.

      The act could make it more difficult for international companies to buy
US assets, especially energy and infrastructure companies.

     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. 

     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 merger 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.

     Among other things, the new law makes the US 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." 

		--Cathy Landry, cathy_landry@platts.com