Italian Oil Giant Reportedly Weighing Bid for Unocal

Italian oil giant Eni reportedly is weighing a takeover bid for Unocal Corp., becoming the fourth rumored suitor in two months for the El Segundo-based energy exploration and production company.

Unocal already is being eyed by ChevronTexaco Corp., China National Offshore Oil Corp. and Royal Dutch/Shell Group, according to published reports.

Shares of Unocal climbed 2.2% on Monday, rising $1.31 to $62.33 on the New York Stock Exchange, after Eni’s interest was reported by the Wall Street Journal, which cited unidentified sources.

Unocal’s stock has soared 51% since Jan. 6, when the acquisition speculation was kicked off by reported interest from China’s third-largest oil company. Unocal is the eighth-largest oil company in the U.S.

Eni’s U.S.-traded shares rose 25 cents to $133.15 on the NYSE, where the company has one of the unique single-letter ticker symbols, E. Eni’s total market value is $106.6 billion.

None of the speculation has yet produced a bona fide offer for Unocal, nor has any of the purported suitors confirmed that they’re interested. But reports that several companies are looking at Unocal suggest that if a formal proposal does surface, it could spark a bidding war among two or more suitors.

Unocal’s stock market value Monday was $16.9 billion. A buyer probably would have to offer more than that, perhaps $65 a share or higher, to successfully purchase the company, analysts have said.

Unocal’s next board of directors meeting is March 30. There is no special meeting scheduled in the meantime, Unocal spokesman Barry Lane said. He declined to comment on the Eni report. A spokesperson for Eni at its Rome headquarters couldn’t be reached for comment.

Eni is Italy’s largest oil and natural gas producer. It was once wholly owned by the Italian government; state interests still own about 30% and public investors the rest.

Most of Eni’s major oil and gas projects are in Italy, Africa, the Middle East and the Caspian Sea. It isn’t a significant player in Asia, where Unocal has several of its prominent fields.

Indeed, Unocal’s properties in Thailand, Indonesia and other Asian regions are one reason it’s considered an attractive target.

Unocal also is a mid-size company that would be a relatively affordable acquisition for one of the world’s big oil companies, which are flush with cash from soaring oil and gasoline prices.

Founded 115 years ago as Union Oil Co. of California, Unocal divested its refining and marketing divisions -- including its Union 76 brand of gasoline -- in 1997 to focus on exploration and production.

Last year, Unocal, with about 6,600 employees, earned a record $1.21 billion on revenue of $8.2 billion. The company has oil and natural gas reserves equivalent to 1.75 billion barrels of oil.