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Last Updated: Friday, 7 January, 2005, 16:17 GMT
China oil firm 'plans Unocal bid'
Chinese driver filling up car
China's demand for energy is continuing to soar
Chinese energy giant CNOOC is planning a major acquisition which could hugely boost its Asian assets, reports say.

The plan, according to the Financial Times, is to offer some $13bn (7bn) for US firm Unocal, which operates in both Asia and the US.

Both companies have refused to comment on the reports.

China's oil and gas companies are keen to expand as the country's demand for energy soars on the back of its recent breakneck economic growth.

The reports of early-stage talks sent Unocal's share price higher, rising 1.1% to $44.63 on Friday morning after a near-8% gain the previous evening.

Buy and sell

The reported figure of $13bn compares with a market capitalisation of $11.7bn for Unocal, which also carried some $2.4bn in debt at the end of 2003.

CNOOC's own value is about $21.5bn.

According to the FT, the plan would be for CNOOC to sell on Unocal's US assets, while support could also come from its state-owned parent, China National Oil Offshore Corporation.

CNOOC would hold onto the US firm's Asian operations, which include Thailand, Indonesia, the Philippines and Bangladesh.

Unocal also retains an interest in a natural gas field off Burma, which has attracted legal difficulties.

In December, the firm said it planned to seek a settlement of human rights claims linked to its involvement in Burma.

"The option of selling the company should be bolstered by settlement," analysts at Fulcrum Global Partners told clients at the time.

Unocal is not the only company rumoured to have attracted CNOOC's attention.

Shell's 34% stake in Australian firm Woodside has also been mentioned as a potential target for the Chinese company.

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