Chevron 1, CNOOC 0
CNOOC has apparently withdrawn its offer for Unocal, as of this morning. Given the support Chevron was garnering, including that of the proxy advisor, this was probably inevitable. Chalk it up to a successful PR campaign on Chevron's part, and to some tyro mistakes by CNOOC's management (and the Chinese leadership in Beijing.)

The most important lesson that should be drawn from this situation is to recognize that it was only the first round in a trend that is likely to continue. The underlying forces behind CNOOC's bid, including China's growing energy appetite, its limited resources relative to its population, and its still not-quite-market mentality favoring control of resources through direct ownership, suggest that we will face similar issues in the future. It would be helpful if that could happen in the context of some frank bi-lateral discussions concerning the "rules of the road" for future transactions in the energy space (or other areas we deem strategic.)

It's one thing to treat the first example as a one-off, resulting in some very mixed messages, but we'd better be prepared with a clearer and more consistent posture next time.