Chevron continues poilitical obstruction of rival bid

| July 1, 2005 | 0 Comments
Chevron continues poilitical obstruction of rival bid

Chevron said on Thursday that China National Offshore Oil Corporation’s bid for Unocal should be referred to the World Trade Organization.

Chevron claimed this is because CNOOC is trying to buy what Chevron called a “critical resource” with funds subsidized by the Chinese government. It characterized the bid as a government trying to enter into a commercial venture.

Chevron is trying to make a case that the money to be used by CNOOC to buy Unocal is a subsidy because the financing provided by the Chinese government is low- or no-interest. CNOOC insists that its bid is completely commercial in nature.

It is unlikely that the issue will be taken up by the WTO because it does not have rules concerning mergers across national borders. Chevron’s efforts, however, will likely cause more heat in the controversy over the CNOOC bid.

And, in fact, in Washington, DC, on Thursday, the US House of Representatives voted 328 - 91 to block CNOOC’s bid for Unocal by denying the Bush administration money to look into the deal.

Under the provision, the Treasury Department would be barred from using federal funds to recommend approval of the CNOOC’s bid.

There is no guarantee that the measure will pass and be signed, but it signals a growing opposition to the deal in Washington.

Meanwhile, a Chevron official also claimed once again that his company’s bid for Unocal is superior even though it is lower because it could be closed sooner and carried no security risks or long regulatory delays.

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