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Wed Sep 19, 2012, 12:51 PM

Democrat pushes feds to block CNOOC from nabbing Gulf leases

A top House Democrat is pressuring the Obama administration to block China’s state-owned oil company from snapping up Nexen’s Gulf of Mexico drilling leases as part of a $15 billion bid to buy the Canadian company.

The Gulf drilling leases currently held by Nexen Inc., would be transferred to China’s CNOOC under the deal. The portfolio includes leases issued under a controversial 17-year-old program that aimed to spur deep-water drilling by waiving royalty payments usually required for oil and gas extracted in federal waters.

Although the 1995 law authorizing that royalty relief said the payments could be required whenever oil and gas prices rose above certain levels, lease contracts written from 1996 to 2000 did not stipulate the government could suspend royalty waivers if prices jumped.

Because Nexen’s leases still qualify for royalty waivers, Rep. Ed Markey, D-Mass., said that a deal putting them in Chinese hands “would amount to a subsidy from American taxpayers to the Chinese government.”
http://fuelfix.com/blog/2012/09/19/democrat-pushes-feds-to-block-cnooc-from-nabbing-gulf-leases/

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