Outwardly, U.S. shale seems a tough sell to Chinese national oil companies (NOCs) these days, but their reluctance may have more to do with the scrutiny that has been brought on to NOCs for years.

Chinese companies are blamed by the U.S. government for attacks on government institutions and corporate espionage, accusations that China’s leaders deny. Chinas’ NOCs also engages in acquisitions and joint venture in which it may get more out of a deal—particularly technology—than meets the eye.

China NOCs have found it increasingly difficult to invest, including in 2018 when President Donald Trump blocked Singapore’s Broadcom from acquiring Qualcomm for $117 billion. Trump and his predecessor, President Barack Obama, both intervened in Chinese acquisitions.

Prior to that, the instigation of a federal investigation by the Committee on Foreign Investment in the United States (CFIUS) can cause deals to unravel. An $800 million deal by a Hong Kong firm to buy the Alerian Index, which tracks indices for MLPs, has been delayed for months, reportedly due to CFIUS intervention.

Likewise, a $665 million deal to buy ERG Intermediate Holdings was scuttled because the new owner, China’s Goldleaf Jewelry Co., was deemed too close to U.S. military facilities.

Congress, however, isn’t satisfied. In a bipartisan effort, the Senate and House are working to further tighten control of foreign investment in the U.S. and eliminate what legislators see as loopholes by revamping CFIUS. CFIUS makes recommendations to the president, who has the authority to block certain transactions in the interest of national security.

In recent months, Congress had held at least eight hearings on foreign investment, according to law firm Latham & Watkins. Hearings have centered on a continuous, concentrated effort by the Chinese government to acquire technology.

A March 2018 Congressional Research Service report noted that CFIUS has zero oversight of foreign companies that purchase U.S. refineries. Companies such as Saudi Aramco, China’s Sinopec and Russia’s Rosneft. Those companies are buying refineries in the U.S. and around the world, according to the report’s author James K. Jackson, a specialist in international trade and finance.

The dangers of such arrangements aren’t lost on upstream oil and gas companies. Blu Hulsey, senior vice president of government and regulatory affairs for Continental Resources Inc. (NYSE: CLR), said at Hart Energy’s DUG Rockies convention that the company is keeping tabs on the CFIUS debate in congress.

“Those type of situations we’re concerned about from a large scale production standpoint,” Hulsey said. “What happens to refiners if they’re easily transferred to large state producers? It’s a question we need to look at and be cognizant of as independent producers.”

He noted concerns over Russian-controlled Rosneft ability to control U.S. refineries operated by CITGO should its parent company, Petróleos de Venezuela SA (PDVSA), default on a Rosneft loan. CITGO operates 48 petroleum product terminals in 20 states and three refineries in Texas, Louisiana and Illinois and three fully-owned Texas pipelines, according to U.S. Sen. Bob Menendez, a New Jersey Democrat.

For years, China has also been at odds with U.S. regulators and energy companies in the upstream and midstream.

From 2013 to 2015, China led all nations in investments reviewed by CFIUS, according to a report by the committee. China has also been a leader in the acquisition of “critical technology” such as information technology and the aerospace and defense sectors.

While recent trade disputes between the U.S. and China have ratcheted up tension, U.S. officials also cite a long history of government and corporate cyber espionage reportedly originating from Chinese servers.

Hackers have targeted oil, energy and petrochemical companies, who were able to access executive accounts and highly sensitive documents, according to 2013 testimony by Larry M. Wortzel, a commissioner on the U.S.-China Economic and Security Review Commission.

In other cases, cyber criminals in 2012 targeted 23 gas pipeline companies, stealing information that could be used for sabotage. Forensic data suggested the intrusions originated from China, according to a January 2018 report by the Defense Innovation Unit Experimental, which reports to the U.S. Department of Defense.

A Senate bills introduced by Sen. John Cornyn, R-Texas, would sharpen CFIUS’ authority to look at transactions, including identifying countries of “special concern” that involve critical technologies or materials.

The bill would broaden the president’s authority to evaluate foreign investment’s effects on national security.

CFIUS’ authority would expand to include a reviewing of other investment structures, including joint ventures and equity interests; side agreements relating to transfer of intellectual property; financial or passive investments and real estate purchase near U.S. defense facilities; and reexamine previously approved transactions.

The bill has 11 cosponsors, including five Democrats. A companion bill has also been filed in the U.S. House of Representatives. Latham & Watkins said in an April report that Cornyn’s may undergo some changes to address the needs of U.S. business reliant on foreign investment.

Darren Barbee can be reached at dbarbee@hartenergy.com.