CNOOC - UCL spin increases -
from an AP story - spin items highlighted between >>> <<<<
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Fu wouldn't say whether CNOOC might raise its offer.
"I think this is a kind of strategy that shouldn't be discussed," he said. "We don't have firm plans as to what we'll do. But we do have something that we are developing."
Fu denied that CNOOC was acting on behalf of China's government, which is in the midst of a multibillion-dollar campaign to secure foreign oil and gas supplies to power its booming economy.
Some members of Congress are urging President Bush to block CNOOC's bid, arguing that the deal threatens national security.
If Unocal decided to entertain the CNOOC offer, the deal would have to pass the scrutiny of the Committee on Foreign Investment in the United States, headed by Treasury Secretary John Snow.
However, some members of Congress are seeking to bar the Treasury Department from taking such action.
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The chief concern is that CNOOC's bid for Unocal is part of a broader strategy by communist China to hoard energy supplies before they run out.
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In a letter to Congress on Monday, Fu said CNOOC was eager to submit to such a review. He also attempted to address some of the concerns the deal raises about America's energy security by noting that Unocal's oil and gas production amounts to less than 1 percent of all U.S. consumption.
CNOOC also says it would consider selling some Unocal assets and putting those in the United States not connected to oil production under U.S. management if necessary.
CNOOC is based in Hong Kong but 70 percent of its shares are owned by China's third-largest government oil company. Fu is president of the mainland parent company in addition to his posts as chairman and chief executive officer of CNOOC.
"This company is driven purely by economics," Fu said. "If there's a good market, the more we can supply, the more value we can add for shareholders. Not because the government asked us to do it, but because we believe it's the profitable thing to do."
Fu said CNOOC wants Unocal's reserves, 70 percent of which are in Asia and 60 percent of which are gas _ a fuel that China is eager to acquire as an alternative to dirtier coal.
"We are the leading gas player here in China. So we would like to develop our gas assets in Asia," Fu said. But he said CNOOC also would sell to foreign markets: "If you have an international company, you supply oil and gas to international customers."
Fu repeated CNOOC's promise to continue supplying oil and gas produced by Unocal in the United States to American markets.
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Although CNOOC's parent company would supply $7 billion of the proposed Unocal price, Fu said none of that money would come from the Chinese government.
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"Not a cent," he said.
Instead, he said, some $3 billion would come from the parent company's cash reserves and the rest from the mainland company's commercial banks.
"They are confident they will get a good return," he said.
Earlier Thursday, the Chinese government tried to mollify American anxiety, insisting the bid is purely commercial and saying it wanted to see both the United States and China benefit.
"China wants to find a `win-win' result," said Foreign Ministry spokesman Liu Jianchao.
"This issue is a commercial transaction between two companies, and a normal exchange between China and the United States," Liu said. "It should stay free of political interference."
Chevron fell 43 cents, or 0.8 percent, to $56.33, while Unocal shares slipped fell 2 cents, or 0 percent, to $65.18 in midday trading on the New York Stock Exchange. CNOOC's American depositary shares rose 39 cents, or 0.7 percent, to $59.64 on the NYSE.
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Oh my, Commies 'hoarding' oil supplies !
First time I have seen that term used...
How do you get a good return at 3.5% interest, not to mention zero ?
TJ, want to borrow some money at those 'good return' rates ? |
