States Press Unocal for Assurances on Cleanup

Four state attorneys general told Unocal Corp. on Wednesday that they were “deeply concerned” that a proposed deal between the oil company and China’s CNOOC Ltd. could endanger environmental cleanup projects.

California Atty. Gen. Bill Lockyer, along with the top law enforcement officers of Montana, New Mexico and Texas, sent a letter to Unocal President Joseph H. Bryant seeking assurances that Unocal would continue to pay for cleanup at Unocal waste sites in their states. Tom Dresslar, Lockyer’s spokesman said the letter was sent by fax late Wednesday to Bryant’s office in Sugarland, Texas.

CNOOC, which is 71% owned by the Chinese government, has offered to buy El Segundo-based Unocal for $18.5 billion in cash. Unocal officials are weighing the bid against an acquisition proposal from San Ramon, Calif.-based Chevron Corp., which in early April offered to buy the company in a stock and cash deal that was worth $16.5 billion as of Wednesday.

“Should CNOOC’s offer be accepted, we are deeply concerned that the funding for cleanup of the sites in our respective states may be jeopardized,” the officials said in the Unocal letter. “We urgently need assurances that a CNOOC-owned Unocal could and would honor all of Unocal’s current and future environmental obligations.”

Unocal spokesman Mike Thacher said he couldn’t confirm that Bryant had received the letter, but added: “We will review it and respond appropriately.”

Mark Palmer, a spokesman for CNOOC, said the company would “comply with all the laws and regulations of the United States and of states where Unocal has operations, including the relevant laws and regulations governing environmental remediation and worker protections.”

The attorneys general also asked for reassurance that the pension and healthcare benefits due to former Unocal employees would be maintained under a CNOOC deal. They seek a preliminary response from Unocal in two days.