Chinese oil producer makes offer for Unocal

CNOOC said its deal with Unocal would more than double its production and increase reserves by nearly 80 percent.

The company also noted that both it and Unocal have a significant presence in Asia. CNOOC estimated that 85 percent of the combined reserves of both companies are located in Asia and the Caspian Sea region.

The company argued that the combination would result in a more balanced portfolio between natural gas and oil reserves, resulting in protection from price volatility in both commodities.

Chevron, based in San Ramon, California, reaffirmed its bid, saying its offer “combines compelling value, regulatory certainty and accelerated timing, providing a superior transaction for Unocal stockholders.”

The Federal Trade Commission approved the Chevron-Unocal deal in June after Chevron promised not to enforce a patent on reformulated gasoline that the FTC said could raise gas prices in California.

Chevron noted that a deal with CNOOC would require extensive new regulatory approvals in the United States and elsewhere.

CNOOC Chief Financial Officer Yang Hua told Dow Jones Newswires that his company is “prepared to closely cooperate ... to get U.S. approval for this deal.”

CNOOC said it plans to retain “substantially all employees, including those in the U.S.” noting that Chevron, in contrast, plans layoffs.

“We believe the offer will be very good for America as we are going to protect U.S. jobs while continuously marketing (Unocal’s) products in the U.S.,” Yang said.

MORE FROM OIL & ENERGY

Oil & Energy Section Front

Crude advances after Iran seizes Iraqi oil field   Cost of gas falls nearly 4 cents in last two weeks   OPEC unlikely to change production targets Exxon Mobil to buy XTO Energy for $31 billion Iraq hails oil auction but risky sites shunned Iraq opens big slice of oil riches to bidders Saudi oil minister says oil is at ‘perfect’ price Newsweek: New market bubble is brewing Chevron 3Q profit slumps 51 percent BusinessWeek: The coming energy revolution Oil & Energy Section Front   Add Oil & Energy headlines to your news reader: