China's third largest oil and gas producer, China National Offshore Oil Corp (CNOOC), said it will not raise its all-cash US$18.5 billion offer to take over the US oil and gas company Unocal, in a move to protect shareholders' interests.

CNOOC made the statement in an email sent to China Daily Thursday, responding to rival bidder Chevron's cash-plus-stock offer of US$17 billion earlier on Wednesday.

The Beijing-based oil firm said it regrets Wednesday's decision by Unocal's board of directors to accept Chevron's amended higher bid, and to recommend its shareholders vote in favour of the Chevron bid on August 10.

"For the sake of our shareholders, the company has no intention to raise its all-cash bid, and we will continue to monitor market changes," CNOOC said in the statement.

The Chinese oil giant said it still considers its all-cash offer of US$67 per share is competitive and is superior to Chevron's cash-plus-stock proposal, even though its US rival has increased its bid.

"For Unocal's shareholders, CNOOC's bid has a fixed value and obviously is a higher price," CNOOC said.

Chevron Corp, which previously proposed a US$16 billion cash-plus-stock bid to acquire Unocal, raised its bid by US$1 billion on Wednesday, which comprises 40 per cent cash and 60 per cent stock.

China's largest offshore oil and gas producer CNOOC last month unveiled its ambitious plan to take over the US oil producer Unocal for US$18.5 billion, and said the merger would bring "superior value" to Unocal shareholders.

The Chinese oil company has promised to keep the oil and gas produced by Unocal in the United States and in the Gulf of Mexico for the US market after the proposed purchase, and retain the jobs of all Unocal's employees in the United States, in contrast to Chevron's plan to axe workers.

Source: China Daily