Chevron Swoops In At the 11th Hour
Remember in 2005 when oil producer Unocal was acquired by Chevron (CVX)? What may have been forgotten is that only a few months before the Chevron/Unocal deal went through, Chinese oil company China National Offshore Oil Corporation (CEO) was offering $18.5 billion to gain the foothold Unocal had in the United States oil market.
Between the public and political opposition, Congress managed to insert a clause into a new energy law that bought Chevron the time it needed to get its checkbook out and steal the deal from CNOOC. The biggest reason the bid from the Chinese company was dropped? Because Unocal wasn’t willing to reimburse CNOOC for the costs that would have been associated with killing the agreement with Chevron.
The maneuver wasn’t one without consequence. CNOOC also happened to be one of Chevron’s biggest Asian trading partners. In fact, the two companies had just entered into a long-term venture to sell liquefied natural in China. The relationship became instantaneously tense, and the echoes of the perceived-as-dirty deed are still ringing.