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CNOOC may make $20 billion cash bid for Unocal

Tuesday, June 21, 2005 | 9:35 a.m.

CNOOC Ltd., China's largest offshore oil and gas producer, may bid about $20 billion in cash for Unocal Corp., the eighth-biggest U.S. oil company, trumping an offer from Chevron Corp., people familiar with the plan said.

The Beijing-based company will offer about $71.50 a share, 10 percent higher than a bid made by San Ramon, California-based Chevron on April 2, the people said, asking not to be identified. It would be the world's second-largest cash offer for a company in at least six years, data compiled by Bloomberg show.

China needs overseas energy assets to help fuel its $1.65 trillion annual economy, the world's fastest-growing major market. Paying with borrowed funds would cost state-controlled CNOOC about $1.2 billion in yearly interest payments, the same as Unocal's net income in 2004.

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