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Fu Chengyu, Chairman and CEO of China National Offshore Oil Corporation (CNOOC) Ltd., said Friday that his corporation is braced to participate in a review of the Committee on Foreign Investment in the US (CFIUS) of its merging transaction of Unocal.
In a public statement, Fu said that CNOOC Ltd. is pleased that Unocal has indicated its readiness to engage in the talks concerning CNOOC Ltd.'s all cash offer and CNOOC Ltd. has been prepared to start immediately.
CNOOC Ltd., China's largest offshore oil and gas producer, announced early Thursday that it has proposed a merger with Unocal, a major US oil company, offering US$67 in cash per Unocal share.
The offer values Unocal at about US$18.5 billion, representing a premium for Unocal's shareholders of about US$1.5 billion over the value of Chevron Corporation's offer, based on its closing price on the New York Stock Exchange (NYSE) on Wednesday.
As having indicated upon announcing the bid, Fu reiterated that CNOOC Ltd. believe this offer brings superior value to Unocal shareholders.
"It is important to know that 70 percent of Unocal's current reserves are located in Asia, and that is one of the reasons why this transaction makes sound business sense for our company," he said.
In the statement Fu reaffirmed that substantially all of the oil and gas produced by Unocal in the US will continue to be sold in the US, and the development of properties in the Gulf of Mexico will provide further supplies of oil and gas for American markets.
Fu also restressed the commitment on behalf of CNOOC Ltd. to retain the jobs of substantially all of Unocal's employees, as opposed to Chevron's plan to lay off employees, especially in the Unite States.
According to him, in preparing the bid, CNOOC Ltd. always anticipated that its merger with Unocal would be reviewed by the CFIUS and they are fully prepared to participate in such a review with assurances to Unocal to address concerns relating to energy security and ownership of Unocal assets located in the US.
CNOOC Ltd. has said they are prepared to sell or take other actions with respect to Unocal's minority pipeline interests and storage assets as long as such a sale does not cause substantial economic harms to Unocal, and will reiterate this commitment to the CFIUS committee at proper time, said Fu.
"We are also open to discussing with CFIUS placing non-exploration and production assets under American management through arrangements that CFIUS has approved often in the past and are prepared to enter into talks with the CFIUS committee as soon as the committee is ready to do so," Fu said.
(Xinhua News Agency June 25, 2005)
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