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Last Updated: Monday, 4 April, 2005, 15:30 GMT 16:30 UK
US oil giants agree $18bn merger
Unocal truck at oil storage facility
ChevronTexaco will get a significant boost from the buy
Chevron Texaco has taken over oil exploration company Unocal in a cash and share deal worth $18bn (9.6bn).

The deal will help ChevronTexaco boost its oil and natural gas reserves in the Asia Pacific region.

ChevronTexaco, the number two US oil firm saw off competition from a number of rivals, including China National Offshore Oil group, to acquire Unocal.

Analysts said Unocal's exposure to the oil thirsty Asian markets would make it a "good fit" with ChevronTexaco.

'Hot market'

Among its peers, Unocal has the largest exposure to the region where surging economic growth has prompted huge increases in demand for oil.

"If you look at where all the assets are they are pretty close to hot markets," said analyst Subash Chandra of Morgan Keegan.

ChevronTexaco said it expected oil-equivalent production from the combined business to come in at about three million barrels per day, adding that Unocal would increase production and reserves by about 15%.

Shares in ChevronTexaco fell 3.02% on the news to $57.52, while Unocal fell 7.3% to $59.65 in late morning trade on Wall Street - despite the news coming on a day when oil prices hit record highs over the $58 mark.

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