As a result, some expect that CNOOC might, as a gesture of good faith and transparency, put US$18.5 million in an escrow account as a sign that it will guarantee to come through with an offer.
Unocal said on Thursday that it would begin talks with CNOOC. Executives briefed on the discussions said that while Unocal's executives would prefer to do a deal with Chevron, they hope to play off one competitor against the other, thereby securing an even higher price for the company.
Bankers have also been trying to rustle up other energy companies who could put Unocal at the center of a full-blown bidding war. Yet while Eni of Italy had been interested in Unocal in the spring, it ultimately did not make a bid. New bidders like Total of France, which has nearly US$10 billion in cash, are not likely to emerge, those close to the negotiations said.
Chevron is offering Unocal shareholders a combination of 0.7725 of a share of Chevron stock and US$16.25 in cash. Based on Chevron's closing price on Friday of US$56.69, that offer is currently worth about US$60 a share. CNOOC's offer is US$67 a share in cash.
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