Chinese Firm Presses Its Offer for Unocal

Executives from Chinese oil company CNOOC Ltd. will meet this week in New York with takeover target Unocal Corp. and may consider sale options for some of Unocal’s U.S. assets to try to ease political tensions over its unsolicited bid.

More than 40 U.S. lawmakers have urged the Bush administration to closely scrutinize the Chinese company’s $18.5-billion offer for El Segundo-based Unocal.

CNOOC would gain Unocal’s prized oil and natural gas reserves in Asia and the Gulf of Mexico as well as its proprietary drilling technology and mining assets. But CNOOC, responding Monday to congressional critics who said the deal was a threat to national security, said it welcomed U.S. scrutiny.

A person familiar with state-owned CNOOC’s strategy said the company, in a bid to ease U.S. resistance to the deal, was willing to carve out assets such as Unocal’s stake in the Colonial Pipeline and terminals that fed the Strategic Petroleum Reserve, and put them in a management trust or sell them. The Colonial Pipeline delivers fuels to terminals in 12 states in the South. The Strategic Petroleum Reserve is the government’s emergency national oil stockpile.

CNOOC Chief Financial Officer Yang Hua will lead a group of executives to New York to discuss its bid, a second person familiar with the matter said.

CNOOC is trying to persuade Unocal’s board to recommend that shareholders accept its all-cash bid, representing a premium of about 10% to a $17-billion stock-and-cash offer by rival oil company Chevron Corp.