CNOOC offers $18.5 billion for Unocal; tops Chevron

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Thursday, June 23, 2005 | 9:29 a.m.

CNOOC Ltd., China's third-largest oil producer, offered to buy Unocal Corp. for $18.5 billion in cash, topping the price Chevron Corp. agreed to pay for the U.S. oil and gas company.

CNOOC bid $67 cash per Unocal share, or $1.5 billion more than Chevron's cash and stock plan, the Beijing-based company said in a statement today. San Ramon, Calif.-based Chevron's agreement is "highly likely" to be completed while CNOOC faces "an extensive" regulatory process in the U.S., Chevron said.

The Chinese government-run company's chairman, Fu Chengyu, is attempting the nation's biggest-ever overseas acquisition to secure energy supplies as oil trades near a record in New York. He needs to persuade Unocal's investors that the premium over Chevron's agreed offer -- about 9.4 percent -- compensates for the risk that the U.S. government will block CNOOC's bid.