chinese may be eyeing australia.

If they are interested in Woodside, where does that place HDR?



Costello's nightmare: China eyes Woodside
By Michael Evans
July 20, 2005


The word on Wall Street is that the Chinese may be eyeing Australia.

As the $US18.5 billion takeover battle for American oil and gas group Unocal between a Chinese government-controlled company and the American Chevron Corp becomes increasingly politically charged, there are whispers among hedge funds that if the Chinese miss out, they'll switch focus to Australia's Woodside Petroleum.

And the prospect of the China National Offshore Oil Corp (CNOOC) making a tilt for Woodside would provide a big headache for Federal Treasurer Peter Costello. In 2001, a clearly embarrassed Mr Costello and the Foreign Investment Review Board turned down the bid for the rest of Woodside by Dutch-controlled Shell on the grounds of national interest.

More recently, the bid for WMC Resources by the Swiss controlled Xstrata passed muster - before before being topped by the Anglo-Australian BHP Billiton. But the Chinese controlling a major Australian energy producer could pose a more complex proposition. While Chinese demand has fuelled the Australian resources and sharemarket boom, CNOOC's bid for Unocal is seen by some as China seeking to shore up its own resources security.

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AdvertisementCNOOC's bid stumbled yesterday when its major non-government investor, the American investment house William Blair, sold its stake, saying it did not back the bid.

William Blair officials claimed the Chinese Government was "exerting more pressure" on CNOOC management and board to win the bid, Bloomberg reported.

US company officials have been quietly rumbling over CNOOC's state-owned parent chipping in up to $US7 billion in loans at below market rates and other funds interest-free.

CNOOC executives will appear before a US Congressional panel on Friday.