Quotes of the Day

Fu Chengyu, chief executive officer of CNOOC, is the driving force behind its controversial takeover bid for U.S. oil giant Unocal. A fluent English speaker with a degree in petroleum engineering from the University of Southern California (he's currently a few courses shy of an M.B.A.), Fu met with TIME recently in Beijing to explain why a merger should make sense to Unocal, Washington and his own shareholders.

TIME: Why is buying Unocal a good deal for CNOOC?
Fu: We are a value-driven company. We look at Unocal's assets—both the reserves it has already discovered as well as undeveloped [oil and gas] properties it owns—as a very good strategic fit for us. We are in the oil and gas business in Asia and so is Unocal.

TIME: How do you respond to critics who say this is a diversion from CNOOC's previous strategy of bringing liquefied natural gas back to China and shipping it into booming markets on the coast and inland. After all, most of the gas Unocal owns in Asia is already under contract in countries like Thailand and Bangladesh, so it can't be exported back for use in China.
Fu: This is in no way a diversion. There is potential for gas in the undeveloped properties Unocal has in Indonesia, for example. Second, the other gas businesses there are good assets and we would continue to run them as a responsible international oil and gas company.

TIME: Are you worried that you might be overpaying for those assets at a time when oil prices are perhaps at a peak?
Fu: Not at all. We think Unocal is very good value, and our offer is the superior [one] on the table now.

TIME: Why do you think your bid makes so many politicians in Washington nervous?
Fu: I don't really know, but I would say: look at our company's track record. We do business with many other companies in the world, including Chevron. I personally used to work at Phillips Petroleum [an American company, now called ConocoPhillips] in China. We had 400 people working there, including 200 expats. I came back to CNOOC in 1999. We run this company as professionally as we can, always with an eye on creating value for our shareholders. That's what this deal is about.

TIME: Many people wonder about the Chinese government's role in this bid, given that CNOOC is 70% owned by the state.
Fu: There's a lot of misunderstanding about this. The only thing we needed permission from the government for was to take such a sizable amount of money out of the country [to finance the deal]. That's all. We received that permission from the appropriate financial authorities, and that's been the extent of government involvement.

TIME: If the Bush Administration asks you to divest some of Unocal's U.S. assets before allowing this deal to proceed, would you agree?
Fu: We will address any concerns that [Washington] has. If it's necessary to divest some assets, we would do that, but we are not at that stage yet. We will do everything to explain who we are and why we want to acquire Unocal. We're a transparent company, and this is a good deal for Unocal's shareholders and its employees. That's where I think the focus should be.

• "This Is a Good Deal"