BEIJING, Aug 3: State-owned CNOOC’s failure to properly assess the political risks it faced in trying to acquire US oil major Unocal is a setback but it will not deter China’s drive for overseas energy assets to feed its voracious economy, analysts said on Wednesday.

After weeks of uncertainty it came as little surprise that China National Offshore Oil Co. aborted its bid for America’s ninth largest energy company in the face of mounting opposition in Washington.

“We thought all the way that it would not get through the bid process in the US,” said Belle Liang, energy analyst at Core Pacific Yamaichi. CNOOC took markets by surprise in late June when it launched an $18.5 billion cash bid for Unocal, trumping a $16.5 billion offer from US rival Chevron.

Although Chevron hit back in July with an improved offer in cash and stock that valued Unocal at about $17.1 billion, the politics of a communist country taking over US assets proved far too controversial for Capitol Hill.

“It came to signify the general struggle between the US and China,” said Kurt Barrow, a senior partner at energy consulting firm Purvin and Gertz in Singapore.

“It was an easy target to gain points with the US electorate,” added Barrow, who said other factors such as the high price of oil as well as ongoing trade frictions over textiles and the yuan all combined to derail the takeover.

Chinese oil companies have struggled in the past to compete against larger, more powerful American and European concerns, lacking their deep pockets and political clout.—AFP