CNOOC may bid $20b for Unocal: Report

CNOOC Ltd., China's largest offshore oil and natural-gas producer, may bid about $20 billion in cash for U.S. oil company Unocal Corp. to trump an offer from Chevron Corp., said people familiar with the plan as quoted by Bloomberg.

State-controlled CNOOC would offer about $71.50 a share, said the people, who asked not to be identified. That's 15 percent higher than the price San Ramon, California-based Chevron agreed on April 4 to pay in stock and cash. Unocal has reserves in such Asian countries as Indonesia and Thailand.

A takeover of Unocal, which would double CNOOC's output, would be the largest-ever overseas acquisition by a Chinese company.

CNOOC's interest in El Segundo, California-based Unocal comes as oil prices surge amid concern producers will fail to keep pace with rising demand. Crude-oil futures Monday touched a record $59.52 a barrel in New York. China is the world's second-largest user of oil, ranking behind only the U.S.

The Chinese government is letting companies expand abroad to gain access to raw materials and overseas markets.

CNOOC may use some of its $3 billion in cash and borrow the rest from banks, the people familiar with the plan aid. CNOOC will seek approval for the bid from its board soon, the people said.

In March, the Beijing-based company's independent directors delayed a vote on a Unocal bid and requested more information to address risks, the people said.

Chevron is "unwavering" in its intent to complete the Unocal purchase, Chevron spokesman Donald Campbell said. "The offer accepted by the Unocal board is attractive, and it has a high degree of certainty as to completion," he said.

Campbell said he couldn't comment on the possible actions of other companies. Unocal spokesman Barry Lane declined to comment on a possible CNOOC bid. Unocal would have to pay Chevron a $500 million breakup fee if it backed out of their purchase agreement, according to a U.S. Securities and Exchange Commission filing by Chevron.(*)