China National Offshore Oil Corporation (CNOOC) released its offer for a merger with Unocal amid concern and speculation. However, as its arch rival Chevron has not shown its ace, it is much difficult to estimate the chance CNOOC's success.

If CNOOC makes it, the deal will be the largest overseas acquisition by a Chinese enterprise and is expected to give CNOOC more say on the international energy market.

However, the unfinished deal has already aroused the attention of the US Congress and Department of Energy. To ensure the deal, CNOOC especially stressed that the it would not affect the US oil and natural gas markets in any way as Unocal's oil and natural gas produced in the US territory will continue to be available on the US market and Unocal's oil and gas outputs account for less than one percent of the total consumption in the US.

CNOOC also makes commitments in its offer on Unocal's assets in the US, including consistency in Unocal's marketing mix and efforts to secure positions for most Unocal staff and management team.

US$18.5 billion is absolutely not a small number, especially when it is offered in cash. With market value of US$22 billion, CNOOC puts nearly all its stakes on this acquisition. It is apparently determined to win.

However, the way ahead for CNOOC's ambition is not smooth. Changes and attacks from the political and economic fronts will be very likely.

By People's Daily Online