Washington (Platts)--29Jun2007

The US Senate passed Friday legislation that could block internationally
based firms from acquiring US oil companies, electric utilities and other
energy-related entities.

     The bill would revise 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 firms.

     In 2005, CFIUS came under heavy fire from US lawmakers when the Chinese
National Offshore Oil Co. attempted to buy Unocal, a Los Angeles-based oil and
natural gas firm. 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, but CFIUS was faulted again
when a Dubai-based company won a contract to manage several major US ports.
That deal was later scuttled under pressure from US lawmakers.

     The bill passed Friday would make 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."

     The Senate passed the bill by voice vote. The House of Representatives
passed a slightly different measure in February, meaning lawmakers will have
to iron out the differences before submitting legislation to President Bush
for his signature.

		--Brian Hansen, brian_hansen@platts.com