The California-based energy company Unocal has takeover bids from Chevron and China National Offshore Oil Company on the table.
Unocal, the ninth largest oil and gas firm in the US, has generated plenty of heat as the focus of rival acquisition bids. One offer, a cash and stock bid from Chevron, values the company in the $16 billion USD area.
China’s CNOOC stepped in with an all cash offer of $18.5 billion, a pledge from CNOOC’s CEO Fu Chengyu to sell Unocal’s US-produced products in the United States, and the potential to keep more US jobs intact than Chevron would.
CNOOC has already requested a review by the US Treasury Department’s Committee on Foreign Investment, one which would automatically happen for this sort of transaction due to national security concerns.
Congress has already begun generating its own heated rhetoric, passing two amendments with bi-partisan support in the House last week that oppose the transaction. China’s Foreign Ministry has responded with statements chastising Congress.
Foreign Ministry Spokesman Liu Jianchao characterized the transaction as a normal business deal, saying: “CNOOC’s bid to acquire the Unocal Corp. is a commercial activity between enterprises and should not be interfered by politics.”
“The relevant people should not make a fuss over this, not to mention interfering (in) the mutual cooperation with political factors.”
The Chinese government owns 75 percent of CNOOC; when asked how CNOOC obtained $7 billion USD in zero or low interest loans below market rates, the spokesman did not directly answer the question. He said that China does not see the offer as a “zero-sum” game with losers and winners.
“What I wish to say is that China seeks win-win results,” he said.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
