IV 

109TH CONGRESS 

1ST SESSION H. RES. 344 

Expressing the sense of the House of Representatives that a Chinese stateowned energy company exercising control of critical United States energy 

infrastructure and energy production capacity could take action that 

would threaten to impair the national security of the United States. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 29, 2005 

Mr. POMBO (for himself, Mr. OXLEY, Mr. HUNTER, Mr. BARTON of Texas, 

Mr. NEY, and Mr. HYDE) submitted the following resolution; which was 

referred to the Committee on Financial Services, and in addition to the 

Committee on International Relations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

RESOLUTION 

Expressing the sense of the House of Representatives that 

a Chinese state-owned energy company exercising control 

of critical United States energy infrastructure and energy 

production capacity could take action that would threaten 

to impair the national security of the United States. 

Whereas oil and natural gas resources are strategic assets 

critical to national security and the Nation’s economic 

prosperity; 

Whereas the global demand for oil and natural gas is at the 

highest levels in history; 
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•HRES 344 IH 

Whereas the global excess capacity of oil production, at between 1,500,000 and 2,000,000 barrels per day, is at its 

lowest level in the past several decades, contributing to 

world oil prices reaching historic highs of above $60 per 

barrel; 

Whereas natural gas globally is the fastest growing component of primary energy consumption, projected to increase by nearly 70 percent by 2025; 

Whereas the National Security Strategy of the United States 

approved by President George W. Bush on September 17, 

2002, concludes that the People’s Republic of China remains strongly committed to national one-party rule by 

the Communist Party; 

Whereas China’s daily consumption of crude oil grew by nearly 850,000 barrels in 2004, accounting for more than 

one-third of the increase in world demand for oil in 2004; 

Whereas China’s consumption of crude oil is expected to grow 

by an additional 7.5 percent in 2005, and world oil prices 

are projected to rise significantly as a result of increasing 

demand from China for oil; 

Whereas notwithstanding the increasing demand from China 

for oil, domestic Chinese output of oil has remained relatively stagnant; 

Whereas on June 23, 2005, the China National Offshore Oil 

Corporation (CNOOC) announced its intent to acquire 

Unocal Corporation, in the face of a competing bid for 

Unocal Corporation from Chevron Corporation; 

Whereas the People’s Republic of China owns approximately 

70 percent of CNOOC; 
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•HRES 344 IH 

Whereas a significant portion of the CNOOC acquisition is 

to be financed and heavily subsidized by banks owned by 

the People’s Republic of China; 

Whereas Unocal Corporation is based in the United States, 

and has approximately 1,750,000,000 barrels of oil equivalent, with its core operating areas in Southeast Asia, 

Alaska, Canada, and the lower 48 States; 

Whereas CNOOC has made various representations about its 

intention to sell oil developed in the Gulf of Mexico to the 

United States, but has not made any commitment to sell 

other natural gas and oil it develops into global energy 

markets instead of shipping it directly to China; 

Whereas a CNOOC acquisition of Unocal Corporation would 

result in the strategic assets of Unocal Corporation being 

preferentially allocated to China by the Chinese Government; 

Whereas a Chinese Government acquisition of Unocal Corporation would weaken the ability of the United States 

to influence the oil and gas supplies of the Nation 

through companies that must adhere to United States 

laws; 

Whereas Unocal Corporation was responsible for the production of energy equivalent to approximately 411,000 barrels of oil per day in 2004, which is approximately onethird of all global excess oil production capacity; 

Whereas CNOOC’s control of Unocal Corporation’s productive capacity would mean control of approximately onethird of all global excess oil production capacity; 

Whereas the petroleum sector uses a range of sensitive technologies for exploration (such as seismic analysis and 

processing, downhole logging sensors, and modeling soft-
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•HRES 344 IH 

ware), production, and refining (such as processing technologies and equipment), including technologies that have 

‘‘dual-use’’ commercial and military applications; 

Whereas several of the technologies used in oil and energy 

production require export licensing for export from the 

United States to China; 

Whereas the CNOOC acquisition of Unocal Corporation could 

provide access to Unocal Corporation’s sensitive dual-use 

technologies that the United States would otherwise restrict for export to China; 

Whereas oil companies owned by the People’s Republic of 

China are active in parts of the world, such as Sudan 

and Iran, that are subject to United States sanctions 

laws, and the national security of the United States is 

threatened by the export of sensitive, export controlled, 

and dual-use technologies to such countries; 

Whereas barriers to the ability of the United States Government to enforce export controls and sanctions could pose 

a direct threat to the national security of the United 

States; and 

Whereas section 721 of the Defense Production Act of 1950 

(50 App. U.S.C. 2170) authorizes the President to suspend or prohibit any foreign acquisition, merger, or takeover of a United States corporation that threatens the 

national security of the United States, if the President 

finds that ‘‘there is credible evidence that leads the President to believe that the foreign interest exercising control 

might take action that threatens to impair the national 

security’’ and other provisions of law ‘‘do not in the 

President’s judgment provide adequate and appropriate 
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•HRES 344 IH 

authority for the President to protect the national security’’: Now, therefore, be it 

1 Resolved, That it is the sense of the House of Rep2 resentatives that— 

3 (1) the Chinese state-owned China National 

4 Offshore Oil Corporation, through control of Unocal 

5 Corporation obtained by the proposed acquisition, 

6 merger, or takeover of Unocal Corporation, could 

7 take action that would threaten to impair the na8 tional security of the United States; and 

9 (2) if Unocal Corporation enters into an agree10 ment of acquisition, merger, or takeover of Unocal 

11 Corporation by the China National Offshore Oil Cor12 poration, the President should initiate immediately a 

13 thorough review of the proposed acquisition, merger, 

14 or takeover. 

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