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Thursday, Feb 2, 2023

Chevron Denies It Will Seek WTO Aid in Unocal Bid

Chevron Corp. disputed a Financial Times story that said it will seek World Trade Organization intervention in rival CNOOC Ltd.’s $18.5 billion bid for Unocal Corp.

“Contrary to some media reports, Chevron is not seeking WTO intervention of the China National Offshore Corp.’s bid for Unocal,” Chevron said in a press release.

The Financial Times article quotes Chevron Vice Chairman Peter Robertson at length, and says that Chevron plans to seek WTO intervention on the bid by CNOOC, a company that is 70 percent owned by the Chinese government.

“There is something a little wrong with a set of trading rules that allow a government to enter a commercial playing field, in a sense, and to subsidize a bid to pick up these assets,” Robertson was quoted as saying on the Financial Times Web site. “If you can get free money, there is no end to this. So it seems like there is sort of a trade rules issue here that somebody needs to deal with.”

Separately, Bloomberg News reported that Chevron is courting favor with Unocal executives by identifying 20 that it plans to promote if its $16.2 billion offer is accepted by Unocal shareholders. Unocal and Chevron are drawing up plans for how the combined company would be structured.

Chevron’s stock-and-cash offer values Los Angeles-based Unocal at just under $60 a share, which is 12 percent less than CNOOC’s all-cash bid of $67 per share.

Chevron has repeatedly state that it would not up the price of its bid, though observers expect the oil giant to increase its offer before putting the vote to Unocal shareholders on Aug. 10.

Robertson said in the interview with the Financial Times that if China could buy “a critical resource like energy with free money, then that’s not a commercial transaction at all.”

He said as much as $10 a share of the CNOOC bid may be subsidized by the Chinese government.

“I think the country whether it’s the U.S. or the U.K. or any country ought to take a hard look at that,” he told the Financial Times. “I think WTO rules are intended to make sure that doesn’t happen.”


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