Chevron Bid May Deflect Cnooc to Marathon
Chevron Corp.’s bid for Unocal may have outdone China’s 70 percent state-owned oil giant Cnooc Ltd. While that news is heartening to many who were uneasy about the possible acquisition, analysts say Cnooc may now set its sights on Marathon Oil Corp.
Cnooc made a cash bid of $18.5 billion to acquire the 8th largest US oil producer, Unocal Corp. But that offer was passed over by Unocal in favor of $17.1 billion in cash plus an attractive stock offer from 2nd largest producer Chevron Corp. Cnooc has until August 10 to up the ante. But most believe Cnooc will not attempt to beat Chevron’s offer.
Bloomberg reported, “Chevron has probably knocked Cnooc out of the water,” said Stephen Leeb of Leeb Capital Management in New York. Cnooc may decide “to bid for another American oil company without the sort of competition they’re facing now.”
The other for-sale oil companies include Houston-based Marathon Oil, the 4th largest US oil producer, Amerada Hess, or Murphy Oil.
US legislators have already threatened to block Cnooc’s bid for Unocal for fear that Chinese ownership of vital US infrastructure would be a threat to the economy and national security. A switch in intentions to a much larger producer won’t ease any tensions, especially as China inflates its currency against the dollar.
Cnooc said today that it won’t up its bid for Unocal.
“We’re making a rational bid in the light of shareholders’ interests and there is no plan to change the current offer,” spokesman Xiao Zongwei told Bloomberg.
For the past three years, state-owned Cnooc has been buying up stakes in oil and gas projects in Canada, Australia, Indonesia, and Kazakhstan as China attempts to boost supplies to hungry, rapidly growing economy.
A Chinese acquisition of an American oil producer wouldn’t be the first time US interests have been sold to state-owned companies. Saudi Aramco, Royal Dutch Shell Plc, and Venezuelan-owned Citgo Petroleum Corp. already own US refineries.
No comment came from Marathon spokesman Paul Weeditz when asked about Cnooc’s interest in the company.
“The Chinese are not going to stop trying to acquire American oil assets,” said Leeb. “The Chinese believe oil is an ever more dear commodity that is going to just get harder and harder to find.”