Unocal may back CNOOC bid, on conditions
(Agencies)
Updated: 2005-07-07 15:37

U.S oil firm Unocal said they might consider shifting their backing over a takeover bid from Chevron to China National Offshore Oil Company (CNOOC) if the Chinese company pledges to meet US regulator's requirements on divestments and other issues, the Financial Times reported Wednesday on its website.

China National Offshore Oil Corporation's (CNOOC) oil rigs is seen in China's Liaodong Bay of the Bohai sea February 3, 2005. [newsphoto]

In another development, CNOOC Chairman Fu Chengyu said Wednesday that his company might raise its US$18.5 billion takeover bid for Unocal if that is what it takes to win the deal, the Washington Post reported.

Fu said in an interview that the company has decided that it must beat a lower bid from U.S. oil company Chevron Corp., according to the article.

In a separate article, the Post reported that some big Unocal shareholders, who represent a minority of the company's stockholders, have decided Chevron must raise its $16.5 billion bid if it hopes to compete with CNOOC.

The Unocal shareholders also said they don't think CNOOC's bid poses any threat to national security and expected the Bush administration to approve the deal over Congressional objections.

Fu said critics of his company's bid did not understand that market reforms in the last 20 years in China have forced CNOOC and other Chinese companies to adopt market practices and to focus on profitability.

Unocal's shareholders are expected to vote on Chevron's takeover bid on Aug. 10. Winning backing from Unocal's board, which will make a decision next week, is crucial if the CNOOC wants to persuade Unocal's shareholders to reject Chevron's offer.

The CNOOC announced in late June that it had proposed a merger with Unocal, a major US oil company, offering 67 US dollars in cash per Unocal share, totaling 18.5 billion dollars. 

If successful, it will be the biggest-ever overseas acquisition for a Chinese company.

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