Bush expects review of CNOOC' bid for Unocal
(Agencies)
Updated: 2005-06-28 08:39

WASHINGTON - The Bush administration expects an appropriate national and economic security review if China's CNOOC Ltd. is the winning bidder for Unocal Corp., a White House spokesman said Monday, while CNOOC vowed to keep U.S. jobs if it should acquire the oil company.

"There are procedures in place, and if a bid goes through then we would expect the appropriate procedures to be followed," White House spokesman Scott McClellan said.

He said the White House was following the issue closely.

Executives from CNOOC and takeover target Unocal meet in New York this week and some fund managers say the $18.5 billion bid has a 50-50 chance of success, despite heavy political resistance in Washington. CNOOC oil rig in China's South Sea is seen in this photograph taken February 2, 2004. [newsphoto]

Such transactions are typically reviewed by the Committee on Foreign Investment in the United States, which determines whether a deal in which a foreign company buying an American company poses risks to national or economic security.

CNOOC offered $18.5 billion in cash last week to acquire the U.S.-based Unocal (up $0.29 to $65.97), a richer bid than the $16-billion plus cash and stock offer it already has accepted from Chevron Corp. (up $0.37 to $57.06) Chevron is pushing for an August vote on its offer.

Separately, CNOOC reiterated Monday its commitment to not only retain the jobs of "substantially" all of Unocal Corp.'s staff, but also keep its U.S. oil and gas production output in the United States, according to a letter submitted members of Congress.

The CNOOC letter came in response to a letter from more than 40 U.S. lawmakers urging the Bush administration to take a closer look at the bid.

"We had planned for and want to participate in a (government) review of the transaction as soon as possible," CNOOC Chairman and Chief Executive Officer Fu Chengyu said in a statement. "We believe it is vital to the success of the possible merged company."

Executives from CNOOC are headed to the United States this week to discuss the bid with Unocal, a person familiar with the matter told Reuters Monday.

CNOOC has said all along it welcomed a review by the Committee on Foreign Investment in the United States, or CFIUS, a body chaired by the secretary of the Treasury that reviews acquisitions of U.S. companies by foreign concerns where there could be national-security implications.

Lawmakers want a review of the bid.

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