Lawmaker wants royalties in CNOOC deal

by on July 30, 2012 8:17 pm BST

In a letter to Treasury Secretary Timothy Geithner, Markey said Nexen has not paid royalties on 32 million barrels of oil and 34 million cubic feet of natural gas drilled in the US Gulf of Mexico through May 2012, Reuters reported.

Nexen holds at least two leases issued under the 1995 Deep Water Royalty Relief Act, said Markey, the top Democrat on the House of Representatives Natural Resources Committee, who has long criticized companies that have benefited from a royalty loophole in the law.

“Giving valuable American resources away to wealthy multi-national corporations is wasteful, but giving valuable American resources away to a foreign government is far worse: it has the potential to directly undermine American economic and national security,” Markey said in the letter according to the news wire.

Markey is the second US lawmaker to ask Geithner to put conditions on CNOOC’s bid for Nexen, which has about 10% of its assets in the US Gulf.

Geithner chairs a panel that examines foreign investment in US assets for national security issues, and has the power to block deals or require modifications such as divestitures.

On Friday, Democratic Senator Charles Schumer told Geithner that the United States should use CNOOC’s bid as an opportunity to demand changes to China’s foreign investment policies.