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Last Updated: Friday, 24 June, 2005, 22:24 GMT 23:24 UK
CNOOC ready to discuss US oil bid
Unocal truck at oil storage facility
CNOOC has offered to leave some Unocal assets under US control
Chinese oil firm CNOOC is ready to hold talks with takeover target Unocal and the US government about its $18.5bn (9.8bn) bid for the US group.

The group said it hoped the offer of talks would address concerns about its bid for the ninth biggest US oil firm.

CNOOC tabled its bid for Unocal on Thursday - triggering a bidding war with prospective buyer Chevron.

Unocal has said it will consider the Chinese bid, but added it remained committed to Chevron's lower $18bn bid.

The group also said it had received permission from Chevron to talk to CNOOC about its proposed bid.

Delay worries

The Chinese group is hoping its all cash proposal will win out over Chevron's cash and share offer.

Substantially all of the oil and gas produced by Unocal in the US will continue to be sold in the US
Fu Chengyu, CNOOC

However, it is facing a number of hurdles that could mean lengthy delays, and kill off the deal.

Four members of Congress have urged the US government to review the security implications of allowing a Chinese state-controlled firm to take control of the firm - a process that would be examined by the Committee on Foreign Investment in the US (CFIUS).

But CNOOC has moved to allay those fears by saying it is willing to discuss selling some Unocal assets and allow US management to run others.

Deal 'concessions'

"We are fully prepared to participate in a CFIUS (Committee on Foreign Investment in the US) review of the transaction and we have proactively made assurances to Unocal to address concerns relating to energy security and ownership of Unocal assets located in the United States," CNOOC chief executive Fu Chengyu said in a statement.

"Substantially all of the oil and gas produced by Unocal in the US will continue to be sold in the US," Mr Fu added.

However, while noting that 70% of the group's oil and gas assets were in Asia he declined to say what plans CNOOC had for them.

Meanwhile, in an effort to take advantage of any delays in the Chinese bid, Chevron has moved its timetable for the takeover forward to August.

"Given the regulatory hurdles and longer approval time, the 9% premium may not be enough incentive for Unocal to terminate the Chevron agreement," Bruce Edwards, analyst at AG Edwards, said in a research note - adding he was confident Chevron would win out in the takeover tussle.

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