NEW YORK, April 4: ChevronTexaco Corp., the number two US oil company, announced on Monday that it would purchase rival Unocal in a stock and cash deal valued at $18bn, including debt. The deal, the biggest in years in the oil sector, came amid reports of a battle for Unocal between the US oil giant, Italy’s Eni SpA and China National Offshore Oil.

The sale, which must be approved by shareholders and US regulatory agencies, is expected to significantly strengthen ChevronTexaco’s position in the energy market.

“Unocal is a unique independent with supermajor assets that are an excellent fit with our existing portfolio and our long-term strategies,” ChevronTexaco chief executive Dave O’Reilly said in a statement.

“It is an attractive transaction that provides value in both the near and long-term,” O’Reilly said. The deal for Unocal, one of the largest independent oil and gas exploration firms, will increase ChevronTexaco’s production and reserves by about 15 per cent, the statement said.

The combined firm would become the top oil and gas producer in Thailand and bring in extensive oil and gas producing operations in Indonesia.

The acquisition will also give ChevronTexaco the second-largest interest in the Azerbaijan International Operating Company oil producing operations, broadening its operations in the Caspian region.

“Over the past several years Unocal has been highly successful in building a portfolio of major international and deepwater assets and prospects,” said Unocal chairman and CEO Charles Williamson.

ChevronTexaco is structuring the deal as 75 per cent stock and 25 per cent cash, and it plans to assume $1.6 billion in debt. ChevronTexaco expects to issue 210 million shares in the deal and pay $4.4 billion in cash.

—AFP