Posted on 07/05/2005 12:05:22 AM PDT by neverdem
The last thing Chevron wanted when it made its $16.8 billion offer for Unocal back in April was to be pitted in a takeover battle against the Chinese government.
After all, one of the main reasons it went after Unocal, a California-based independent oil company with vast resources in Asia, was to sell oil and gas to the fastest-growing energy market in the world, China. But on June 22, when the state-controlled China National Offshore Oil Corporation, or Cnooc, countered with a higher bid for Unocal, Chevron found itself in a delicate position.
Since then, Chevron's managers have gone into overdrive to portray the Chinese government-backed offer as unfair competition and to close their deal as quickly as possible. They have received support from many lawmakers in Washington, who have painted the Chinese offer as a threat to America's national security.
Now, Chevron must walk a fine line between fending off Cnooc's $18.5 billion bid for Unocal and the risk of alienating Cnooc, its largest partner in China. There, for example, the two companies have teamed up in a $35 billion agreement to ship liquefied natural gas over the next 25 years from several huge Australian fields where Chevron has part ownership to some of Cnooc's terminals in China. But now, the partners appear to be on a collision course.
Much is at stake for Chevron and its cautious chief executive, David J. O'Reilly. Since 2000, Chevron's oil production has declined every year, and the company has had trouble replacing the reserves it pumps out of the ground. On Wall Street, its share price trails its peers.
With a Unocal deal, Chevron, the second-largest American oil company after Exxon Mobil, hopes to reverse both trends. Mr. O'Reilly estimates the takeover would increase Chevron's proven reserves by 15 percent...
(Excerpt) Read more at nytimes.com ...
Why doesn't the government just nationalize it! Ha!
ping
ping
I thin this problem will get worse, touching off other conflicts between U.S. and China.
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