Wednesday, July 20, 2005

Unocal backs sweetened $17 bln Chevron bid

PHILADELPHIA/SINGAPORE (Reuters) - U.S. oil producer Unocal Corp. endorsed a sweetened $17 billion takeover offer from Chevron Corp. , preferring it to a higher bid from China's state-run CNOOC Ltd. <>.

Chevron , the second-largest U.S. oil company, raised its stock and cash bid to $63.01 per share from roughly $60, turning up the heat in an international battle for producing assets as strong demand and tight supply hold crude oil prices near record levels.

The improved offer for Unocal, which has assets stretching from Myanmar to the Gulf of Mexico, was forced on Chevron by an all-cash, $67-a-share bid from CNOOC worth $18.5 billion.

As I said before, the prospects of China being in control of our second largest oil company was simply unacceptable. It would appear that the Unocal board felt the same way. I don't know whether their decision to take a lower bid was based on patriotism or if the administration quietly prodded them to do the right thing, but the right thing was done.

On a related note, while we fight the good fight in the Middle East, I would hope that we keep a very wary eye on the Far East at the same time. China is looking ambitious, perhaps seizing what they see as our distraction as an opportunity and North Korea is, well, protecting its standing as the planet's preeminent Lunatic Nation-State. To say these are dangerous times would be an understatement.

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