Why China's Unocal Bid Ran out of Gas

Politics and a lack of focus and speed killed CNOOC's chances of success. What lies ahead for the cash-rich but wounded oil company?

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August 4, 2005 at 4:00 AM UTC

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With the Aug. 2 decision by China National Offshore Oil Corp., better known as CNOOC, to drop its $67-a-share offer for Unocal (UCL ), all the pieces have fallen into place for a peaceful acquisition of the independent oil and gas outfit by U.S. giant Chevron (CVX ) -- albeit at a lower bid of $64 a share.

CNOOC's surrender announcement included a hint of bitterness and a slap at the U.S. political arena, where the threat of selling a U.S. concern to one 70%-owned by the Chinese government had ignited a firestorm of controversy. And it left analysts wondering where CNOOC might turn next in its global ambitions.