Posted on 07/06/2005 10:50:06 AM PDT by hedgetrimmer
WASHINGTON : US oil major Chevron ruled out splitting up Unocal if it wins a battle against a state-owned Chinese company for control of the California firm.
Chevron vice chairman Peter Robertson said the China National Offshore Oil Corporation (CNOOC) has no chance of winning Unocal's Asian assets in a carve-up.
"If the idea is that we take the US assets and somebody else takes Asia, that is not why we got into this game," he told The Financial Times.
Unocal's Asian operations, which comprise 70 percent of its total assets, are the key appeal for both Chevron and CNOOC as they struggle to win control of the midsized company.
CNOOC's 18.5-billion-dollar cash bid is worth at least two billion dollars more than Chevron's, which is a combination of cash and stock and was already approved by the Unocal board before the Chinese stepped in on June 23.
But CNOOC's offer has run into fierce political opposition from US lawmakers angry at the prospect of a US oil company falling into the hands of a Chinese communist-run entity.
Robertson reiterated Chevron complaints that about one-third of the financing for CNOOC's bid is coming from low-interest or zero-interest loans from Chinese state-controlled banks.
"I think it is unfair and I think the playing field is not level," he said.
Unocal shareholders will vote on August 10 on the rival bids.
Acknowledging US security concerns over the deal, CNOOC chief Fu Chengyu on Wednesday pledged to sell all of Unocal's US-produced oil and gas in US markets should his company win the takeover battle.
"The American public's anxiety -- that we plan to take fuel back to China -- is based on a misunderstanding," he said in an opinion piece carried by the Asian Wall Street Journal.
Fu characterized CNOOC as a savvy energy company seeking to operate on Western business principles.
"I adhere to the belief that the highest price wins," he said. "The bottom line is that our all-cash offer puts more dollars in the pockets of shareholders and is not subject to the daily fluctuations and uncertainty of the stock market."
CNOOC's offer, unlike Chevron's, is not based on rationalization and cost-cutting, Fu said. Instead, CNOOC is committed to retaining "substantially all" Unocal employees, especially in the United States.
I thought "hegemon" was the nickname for that Jamaican gardener who used to trim my hedges and shrubs down in California. I guess that word has a second meaning...lol.
Nah, it's a Japanese cartoon character.
hegemony: the domination of one state over its allies
Thanks for the ping!
Totally wrong. This is the fruits of a severely regulated capital market in china. Fact is goods can flow freely between the US and China , but capital can not. That is Chevron is not free to buy a chinese oil company while the reverse is true. Further distortions come from the US consumer spending themselves into oblivion while the chinese tend to save and invest for the future. This has nothing to do with free trade of goods and services.
Correct analysis on the surface. Beneath the surface, the US is selling assets to spend today, while China is buying a future revenue stream. Guess who will be better off down the road. It will be the guys who bought a future revenue stream.
Well, I see your point, but if in fact it turns out that this is the peak of the oil market, then the Chinese might live to regret this.
If UNOCAl had any significant US oil supply, it would not be the object of a take over with crude oil at record prices.
Unless their purpose for purchasing the company is geopolitical.
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