Reports: Chinese oil company considers bid for U.S. rival Unocal

The Associated Press

China’s third biggest oil and natural gas company is considering making a bid for all or part of U.S. rival Unocal Corp., published reports said Jan. 7. If true, it would be the latest indication of China’s rising appetite for overseas investment.

The Financial Times said that China National Offshore Oil Corp. was considering a bid of more than $13 billion for all of Unocal, which is based in El Segundo, Calif., and is the ninth biggest U.S. oil company in terms of reserves.

Unocal has a policy of refusing to comment on rumors about acquisitions and mergers, company spokesman Barry Lane said Jan. 7.

Unocal shares rose $1.32, or 3 percent, to close at $45.46 Jan. 7 on the New York Stock Exchange, giving the company a market value of about $11.75 billion.

The newspaper said the state-controlled Chinese company, also known as CNOOC, had asked bankers to study a takeover of the whole company followed by a subsequent sale of the U.S. assets.

It said the contacts between the companies were at a very early stage and that detailed talks had yet to take place.

The Wall Street Journal, which reported CNOCC was eyeing Unocal, said its interest was “highly preliminary” and cited no possible price. The newspaper said Unocal has an attractive array of oil and gas assets in Southeast Asia.

The reports each cited sources who were not identified by name.

China’s economy has been growing rapidly and its expansion has driven up its demand for foreign oil and other commodities and its interest in foreign consumer markets.

In December, Lenovo Group, China’s biggest computer maker, said it was buying International Business Machines Corp.’s personal computer business for $1.25 billion and would assume $500 million in debt.