"When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action...The brotherhood which free trade would establish between the nations of the Earth would hardly be more fraternal. To call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie."
<http://news.ft.com/cms/s/2fc2c31e-f565-11d9-8ffc-00000e2511c8.html> Unocal board snubs CNOOC's renewed bid By Francesco Guerrera and Joe Leahy in Hong Kong and James Politi in New York Published: July 15 2005 20:24 | Last updated: July 15 2005 20:24 A fresh round of manoeuvring was expected in the takeover battle for Unocal after the board of the US oil and gas group decided on Thursday night not to switch its recommendation from a $16.6bn bid from Chevron to an $18.5bn one from CNOOC. Unocal, which is attempting to extract the best possible offer from the rival suitors, was likely to reach out to CNOOC first to see if it was prepared to raise its offer above the current $67 per share in cash, according to people familiar with the matter. ----------------------------------------- <http://www.washingtonpost.com/wp-dyn/content/article/2005/07/15/AR2005071501889.html> In Washington, Chevron Works to Scuttle Chinese Bid By Jonathan Weisman Washington Post Staff Writer Saturday, July 16, 2005; D01 Days before a Chinese energy company announced its bid for U.S.-based Unocal Corp., a lobbyist from rival bidder Chevron Corp. approached the staff of a sympathetic congressman with a fact sheet on Cnooc Ltd.'s quiet efforts and a potential avenue to thwart such a deal. On June 24, just two days after Cnooc's $18.5 billion bid was announced, Rep. William J. Jefferson (D-La.) was ready with a letter requesting an immediate review of the offer by senior Bush administration officials. In the scramble for Unocal, Chevron was once a reluctant bidder, almost outbid by Italy's ENI SpA in the early stages of the bidding war. But the California energy giant is stirring the political pot in Washington to convince Unocal's shareholders that Cnooc's higher all-cash offer is not worth the risk of an extensive regulatory and security review. A few million dollars in lobbying fees could prove far cheaper than the extra $2 billion Chevron would need to offer to match Cnooc's bid. "For Unocal shareholders, the most important issue is clear. It is a choice between a definitive merger agreement with Chevron, which can close in the next four weeks, versus an uncertain and highly contingent proposal from CNOOC," Chevron chief executive David J. O'Reilly wrote in a Wall Street Journal piece posted on Chevron's Web site. Chevron's already formidable lobbying staff has been bolstered by a who's who of experts and Washington heavyweights: Wayne L. Berman, a top fundraiser for President Bush whose wife is the White House social secretary; Drew Maloney, a former legislative director of House Majority Leader Tom DeLay (R-Tex.); Kenneth J. Kies, a prominent tax lobbyist; former commerce secretary Mickey Kantor; Democratic trade experts Claude G.B. Fontheim and Kenneth I. Levinson; and David M. Marchick, a senior trade official in the Clinton administration who specializes in national security reviews by the high-level Committee on Foreign Investment in the United States. All of the action is coordinated daily during an 8:30 a.m. conference call led by Lisa Barry, Chevron's vice president of government affairs. "They're fielding a full team, and I think they're making all the right moves," said Todd M. Malan, executive director of the Organization for International Investment, which lobbies on behalf of foreign companies. Unocal shareholders are scheduled to vote Aug. 10 on Chevron's $16.5 billion cash-and-stock bid. Chevron has signaled a reluctance to match Cnooc's offer. Chevron's efforts may be yielding results. Since Cnooc unveiled its bid in late June, there has been a steady effort to thwart it -- letters from senators and House members protesting Cnooc's efforts, a House resolution demanding a national security review, another House vote that would deny funding to complete that review, letters condemning Cnooc's lobbying efforts, and a hearing by the House Armed Services Committee warning of China's intentions. House Resources Committee Chairman Richard W. Pombo (R-Calif.), whose district includes Chevron's headquarters, was the author of the resolution demanding a security review. On Thursday, he announced his intention to add language to major energy legislation that would mandate an Energy Department study of China's energy demands before the Cnooc regulatory review can conclude. The House Energy and Commerce Committee will keep the drumbeat going on Tuesday with a hearing into "China's bid for U.S. energy assets." One Chevron lobbyist said the company's task has not been difficult. The Cnooc bid came when tensions with China were already running high. Chinese textiles were flooding into the country. The entertainment and software industries were loudly protesting the theft of intellectual property in China. And soaring gasoline prices had primed Congress for an energy fight. "It just couldn't have been worse timing for China," said the lobbyist, who, like all lobbyists on the deal, spoke on condition of anonymity to avoid jeopardizing contracts. A Cnooc lobbyist said Chevron has played on some lawmakers' national security and trade fears, others' long-standing human rights concerns and others' longtime friendliness to the oil industry. "Frankly, I don't even think you need to lobby the Congress on this one," said Rep. Frank R. Wolf (R-Va.), a longtime critic of China's human rights record. Some analysts say the recent storm of anti-China fervor may be going too far -- even for Chevron. "It may not be an indication of Chevron's intentional tactics," said Robert A. Kapp, former president of the U.S.-China Business Council, "but it is safe to say, were it not for the Unocal offer from Cnooc, we would not be seeing the same range of legislative balloons going up." Chevron has extensive business interests with China, pumping 18,000 barrels of oil a day in the country while pursuing natural gas partnerships with Chinese companies off the coasts of western and northern Australia. "It would do neither Cnooc nor Chevron any good if this whole thing comes out with a farther-reaching meltdown and the utter defeat of one by the other," Kapp said. Chevron spokesman Donald Campbell said the company has not stoked anti-China sentiment, instead staying with dry and substantive arguments that Cnooc's bid has been unfairly financed by no-interest and low-interest loans from government-controlled banks. But in Washington, Cnooc representatives complain, the rhetoric has been far from measured. Peter J. Robertson, Chevron's vice chairman, has called the bidding war for Unocal more a struggle of "geopolitics" than a commercial fight. "We're not competing with a company," he said. "We're competing with a government." Chevron's claim that it has not stirred up anti-China feelings is absurd, Cnooc officials say. "Chevron's massive and no-holds-barred lobbying campaign has clearly been the catalyst for protectionist and anti-China sentiment, which we find most unfortunate," said Michael Buckley, a spokesman for Cnooc.
