When thinking about the players involved in the game in DC, keep in mind Cnooc, Chevron and Unocal have big time free-lance talent working their case for hire. There have been a few puff pieces that caught Quillnews eye. (NYT, WP, SD) Some of the boulevardiers of Gucci gulch, K St. and Georgetown saloons, and the posh luncheon clubs have surfaced. A few of these players include guys usually found in the wings, including two Bush Rangers, heavy duty GOP fund raisers who are in what is often called, lobbying, though it often looks like fund raising to pay for political campaigns and which supports the massive campaign/lobbying/legal industry that so lucratively employs those in what is often called the private sector in the company town of DC. (Don't let the above link's populist rhetoric fool you - both sides - R & D - play this game). The guys at issue here include Wayne L. Berman, a principal of the Federalist Group, who Chevron signed up to help on the Cnooc fight. Another Bush Ranger is James Langdon, who oddly enough also serves as chairman of the White House Foreign Intelligence Advisory Board, and felt secure enough in his position of influence to sign up to help Cnooc. Hmmm. (No, I don't think he is working for anybody but himself here. Kinda brazen, actually, even by contemporary DC standards. Still, given the optics he's recused himself from FIAB matters on this subject, and also guaranteed he will never be listened to again.) Another in the Cnooc camp is a Bush campaign PR whiz, Mark McKinnon. There are a bunch of other reliable DC hands working on this job for all sides. Just keep these political players in mind when you see the "news" stories about what this oil business deal means.
Quillnews word of advise to the hired talent: The last thing an oil industry “client” (in this case, Unocal, Cnooc, Chevron) wants to see are newspaper stories about the high-priced politically wired-up big shots they have felt it prudent to hire to help tug the political oars in the DC shark tank during a regulatory or legislative battle. A friendly word of advice to these VIP counsels: zip it. The more an oil company guy sees the name of a DC hand he was forced to hire in print the more they don’t want to see that DC guy, ever. The industry already sees much of what goes on in DC as a high-tone extortion racket as it is. Any DC talent who take the opportunity to add flash-and-dash publicity about their importance to boost standing or perhaps even future business is on a fool's mission. What is required by the leaders of Unocal, Chevron and Cnooc is a consistent and fair-minded reading on the logistics of the decision-making process, on the thinking and political requirments of government decision makers, and a belief that merit, hard work and luck will make their oil patch deal happen. If the costs are too high or political conditions not right, the company guys need to know that so they can know when to walk. No biggie. It’s just one deal. The world is big and those among its 190+ governments that keep their word, are fair, have rational decision making and possess open and transparent systems win the confidence of investors. Those countries get the investments and the goods. If investors can't get a fair read on what will work in one country or another, they won't bother trying. The education Cnooc (and its government owners) are getting now will be useful down the road. China's learning what will fly in the US. And what won't. (NYT)
To keep some perspective, its hard to beat the points made by Robin West, chairman of PFC Energy, one of DC’s most reliable petroleum industry consulting outfits, in an excellent summary article in the WSJ. West urges all to keep in mind that Cnooc’s bid to buy Unocal is an oil acquisition play that, though complex and emotional, should not divert everyone from understanding that China is here to stay and it is in everybody’s interest that the US and China work together. Money quote:
The Cnooc bid should be seen for what it is -- an aggressive, contested bid filed late. Now the Chinese are demanding exceptions to the rules and sliding past uncomfortable facts. It is not a commercial deal, but rather a government deal financed with cheap government money. The Chinese cannot demand fairness on the one hand, but not play fair with the other. The Unocal deal is also an unfortunate distraction to the vital question of Chinese energy security. The U.S. should cooperate with China, not compete with it. There are ways this can be achieved which can increase not only the mutual energy supply but mutual trust as well. Washington should take this approach, and not be stampeded by Cnooc into an unfair deal.
To Quillnews' readers, keep in mind this is just one oil deal, and Chevron and Cnooc are going to be around after the corporate entity called Unocal is gone. So will (God willing) the US and China. (Both will continue to work on their respective Plans A and Plans B). At the end of the day, what Unocal has in the ground in various parts of the world is largely the “expectation” of petroleum supplies and earnings in the future. There are no guarantees. It’s all a gamble.
Quillnews advise to China: You guys know how to calculate your joss and lay down a bet. So far, as your wisest leaders know, the evidence is that those who let free markets function according to transparent systems of law and order (the US and the WTO trading partners on which you have already bet a handsome poke) win more than they lose. One must in the free market is that the game be played fair on a level playing field, and that every player learn what every Little Leaguer sooner or later knows: “you can’t win ‘em all.”
http://www.unocal.com/responsibility/01cr_report/glance.htm
See link.
Any thoughts on CNOOCs interest in Unocals other activities, especially rare earths and so on?
Posted by: Bruce | 19 July 2005 at 01:54 AM