Unocal Accepts New Chevron Bid

globeandmail.com ^ | 7/20/05 | AP

[eastforker]

Unocal's board of directors has endorsed a sweetened, $17-billion (U.S.) takeover bid from Chevron, rejecting a higher offer from one of China's state-owned oil companies.

[Txsleuth]

This is great news....I will buy Chevron.

[StAnDeliver]

"What good is money if no one will let you spend it."

I don't know the answer to that, but I'm going to enjoy watching the gonks in the PLC find out.

[StAnDeliver]

"plus the fact that they control something like 200 billion of our national debt, they could wreck us with out ever firing a shot."

Uh huh. And when the PLC does that, the massive food riots in Beijing will make for great television as long as the satellite uplink holds.

[blackie]

Works for me ~ Bump!

[staytrue]

Wonder what China's retaliatory forms would be if Unocal accepts Chevron's bid?

Make a bid for Chevron ?

[staytrue]

"a major source of US oil.
"
most of unocal's oil is in indonesia and thailand.

[TAquinas]

Right you are.

I realized only upon reading the story text that it was only an endorsement by the board and that only shareholders voting will determine acceptance of the offer.

It's so sad, though, that the headline (a declarative statement) was misleading.

[lilylangtree]

Wouldn't be surprising if that happened.

[Toddsterpatriot]

We're saved!!

[Toddsterpatriot]

I thought the US has now gone completely insane if we would give China control of a major source of US oil.

Unocal produced less than 500,000 barrels a day in the first quarter. I think we import 12,000,000 barrels a day. They are hardly a major source.

[Toddsterpatriot]

They can destroy this country in less than a week with our economy so tied to them.

LOL! How, exactly?

[steveegg]

It's so sad, though, that the headline (a declarative statement) was misleading.

What else do you expect from the presstitutes? Seriesly, that form is standard operating procedure on reporting mergers, and it is technically correct. The people responsible for running Unocal (and thus, the company) did agree to the Conoco deal, and that action now "locks" the shares controlled by the company itself into voting for the deal. Generally-speaking, the next (and in this case, last because the regulatory hurdles have been cleared) step is little more than a rubber-stamp when the board says to vote for it, which makes the headline not much of a stretch.

Of course, that assumes that CNOOC doesn't try a shareholder revolt and thus a hostile takeover, but with Unocal re-opening the bidding and getting Conoco to up their bid, that would be less likely to succeed.

[TAquinas]

Thanks for explaining this to me.

[steveegg]

Unocal produced less than 500,000 barrels a day in the first quarter. I think we import 12,000,000 barrels a day. They are hardly a major source.

That's a naiive statement on 3 points:

• Somewhere north of 2% of the entire daily consumption (roughly 24,000,000 bbls/day) is not insignificant by any stretch of the imagionation.
• That 500,000 bbls/day is produced at the cost of production; its replacement would have to come from the open market at the higher market prices.
• Outside of Saudi Arabia (which is at best neutral to the US and a member of a cartel that is all-but-openly-hostile to us), there is currently no excess production to be had on short notice. That lack of excess production is one of the major reasons why oil prices are so high and every little jitter moves them disproportionately.

[steveegg]

Not a prob. That's what FRiends are for.

[Toddsterpatriot]

Somewhere north of 2% of the entire daily consumption (roughly 24,000,000 bbls/day) is not insignificant by any stretch of the imagionation.

I'm gonna stick with the idea that 2% is not the same as major.

That 500,000 bbls/day is produced at the cost of production; its replacement would have to come from the open market at the higher market prices.

Ummmm, you think Unocal sells at the cost of production, not the higher open market price? I believe your statements are naive.

[TAquinas]

"Unocal produced less than 500,000 barrels a day in the first quarter. I think we import 12,000,000 barrels a day. They are hardly a major source."

I'm no expert on this issue here.

But in terms of percentage that is a 4% loss, or an additional 4% that needs to be imported. Now, let us assume that we did not lose this 4% and, instead, gained an additional 4% in imported oil. Now the difference is 8%, which I think it's pretty significant. Repeat the scenario and now it becoems crucial.

[Toddsterpatriot]

But in terms of percentage that is a 4% loss, or an additional 4% that needs to be imported.

I said Unocal produced less than 500,000 barrels a day. We do not receive all of Unocal's production. Most of their reserves are in Asia. I suspect most of their Asian production is sold in Asia, although I haven't been able to find any figures. I suspect that if China had purchased Unocal, the US would have "lost" less than 500,000 barrels a day from Unocal.

Now, let us assume that we did not lose this 4% and, instead, gained an additional 4% in imported oil. Now the difference is 8%, which I think it's pretty significant. Repeat the scenario and now it becoems crucial.

Sure, and if that was quadrupled, then we'd be talking about 32%. LOL!

[Toddsterpatriot]

Nearly all Unocal’s current gas and oil output either goes to the countries in which it is produced or is tied up in long-term export contracts. So virtually none is available for sale to China, even if CNOOC takes control of Unocal.

CNOOC Unocal bid as Asian aspect

Just as I suspected, most Asian production stays in Asia.

[montag813]

Wonder what China's retaliatory forms would be if Unocal accepts Chevron's bid?

The bid is sweeter, they have no beef, unless they sweeten theirs big time. THEN if Unocal balks, China can dump U.S. Treasuries, sending mortgage rates skyrocketing and wrecking the housng market, consumer spending and the economy along with it. Then Americans would only have enough money to afford items from China. Win, win.