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July 5, 2005    

Chevron increases political pressure on Unocal bid

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by Brian Turner
Chevron increases political pressure on Unocal bid

Chevron is calling on the United States government to reconsider its policy on the takeover of US-owned companies by foreign investors in the wake of CNOOC’s bid for Unocal.

The vice-chairman of Chevron has called loans by the Chinese government to CNOOC state subsidies and CNOOC’s bid a government attempt to purchase a company for a price higher than its commercial value.

Beijing, meanwhile, has criticized attempts by the US House of Representatives to block CNOOC’s bid by asking that the bid only be reviewed by the Bush administration if Unocal agrees to accept it.

China’s foreign minister called CNOOC’s bid for Unocal a “normal commercial activity” that should not be subject to political interference.

CNOOC, which is getting a loan of US$7 billion from its parent company, insists that the loans are not subsidized by the Chinese government.

Chevron’s position is that the loans amount to government subsidies because CNOOC is a state-owned company and because the loans are low- or no-interest in nature.

Meanwhile, Chevron once again said that it’s offer for Unocal is superior and that it expects that it will prevail in a stockholder vote on August 10.

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