China National Offshore Oil Corporation hires Rothschild on Unocal bid

Independent directors of the China National Offshore Oil Corporation have hired outside consultants - business consultancy Charles River and investment bank Rothschild - to review a plan by management to bid more than $16 billion of US oil company Unocal. CNOOC is believed to be interested in getting Unocal’s assets in Indonesia, Thailand, and Bangladesh in order to gain more energy supplies for China’s active economy.

While it is listed in Hong Kong, CNOOC is a state-controlled company. This move by the independent directors seems to indicate that the independent directors are not sure that the bid is a good deal for investors and may signal an internal split between the directors and management.

If the bid were made, it would give CNOOC additional debt as well as cause a political backlash in the United States, which considers China a growing economic rival. It is thought that the independent directors of CNOOC blocked an earlier bid for Unocal last month just before ChevronTexaco made a $16 billion bid for the American company.