Chinese make bid for Cali Oil Giant

ChevronTexaco's plans to take over West-Coast oil giant Unocal hit a rough patch when a Chinese oil company sought to out-bid them this week:

A state-controlled Chinese oil firm is challenging Chevron's plans to buy Unocal, touching off an international fight over petroleum at a time of dwindling reserves and soaring prices.

The China National Offshore Oil Co. announced Wednesday a cash offer of $18.5 billion for Unocal, an El Segundo (Los Angeles County) company with ample reserves of oil and natural gas. The bid is roughly $1.5 billion higher than Chevron's, which includes a mix of cash, stock and debt.

Both Chevron and its rival -- 70 percent owned by the Chinese government and commonly known as CNOOC -- want Unocal's reserves to shore up their own, since finding and tapping new oil fields has grown increasingly expensive.