ChevronTexaco considering bid for Unocal
ChevronTexaco Corp., the second largest U.S. oil company, is considering making a bid for its smaller rival Unocal Corp., The Wall Street Journal reported on Thursday. Unocal shares jumped more than 11 percent.
The Journal, citing unidentified people familiar with the matter, said ChevronTexaco was in the early stages of its deliberations and said it was unknown whether it would make a formal bid for the ninth largest U.S. based oil and natural gas company.
Unocal's market value was about US$14 billion at the close of trading on Wednesday.
Its shares jumped $6.60, or 12.3 percent, to close at $60.10 in Thursday trading on the New York Stock Exchange, above their 52-week high of $55.26.
ChevronTexaco shares lost 38 U.S. cents to close at $61.19 but are still near their recent 52-week high of $63.15.
Unocal has for years been considered a takeover target, and the China National Offshore Oil Corp., a large state-owned company, recently expressed interest in the El Segundo, California-based company.
Other U.S. oil companies are believed to taken another look at Unocal after news of the Chinese energy company's interest surfaced, the Journal said.
The Journal said the last round of oil industry consolidation began in the late 1990s when low oil prices forced companies to seek partners in an attempt to slash overhead and boost production.
Within a several-year span, Exxon Corp. and Mobil Corp. merged, BP PLC bought Amoco Corp., and Chevron Corp. and Texaco Inc. combined.
But prices are now high, driving up the market value of oil companies, and the majors are facing pressure to keep their reserve figures from slipping. Reserves are an important indicator of future production.
Unocal spokesman Barry Lane declined to comment. "As a matter of policy, we don't comment on rumors and speculations regarding mergers and acquisitions," he said.
Don Campbell, a spokesman for San Ramon, California-based ChevronTexaco, declined to comment on Thursday. -- AP