Shares in Chinese offshore oil producer CNOOC fell 4 per cent today as investor worries grew about a possible bidding war with Chevron for US oil firm Unocal.
Yesterday, a crucial Unocal board meeting to discuss competing bids from Chevron and CNOOC ended without any public statement on the outcome.
State-run CNOOC is bidding $18.5 billion in cash for Unocal, topping a more than $16 billion cash-and-stock offer from Chevron, the second-largest US oil company.
Unocal management has been backing the Chevron bid partly on concerns the Chinese deal may not pass US regulatory hurdles.
Reflecting investors' expectations of a bidding war ahead, Unocal shares have risen steadily to $66.29 per share yesterday, just below CNOOC's offer of $67 apiece. Chevron's offer is valued at just above $60 per share.
Unocal's management is still in talks with CNOOC but is not expected to make any decision on CNOOC's offer immediately.