Uncharted Waters

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he meeting was civil—"no one was shouting or pounding the table," says one attendee—but as the questions mounted, it was clear that Fu did not have the board's backing. At least not yet. On April 1 he called Williamson, telling him he needed to do a bit more work with his board but that CNOOC would still make a formal bid in time for another Unocal board meeting the following day. He was mistaken. Schurtenberger, privately, was seething. "For him it was a trust issue," says a friend of his. "Beyond all the questions about strategy or debt, he just couldn't believe the board was being treated in this fashion." (Schurtenberger declined to comment to TIME.)

The directors told Fu that they would not back the bid unless they were given more time to study it. Fu agreed, and had to phone Williamson back on April 2 and climb down, telling the Unocal CEO that CNOOC would not be coming forth with an offer that day after all. "That couldn't have been an easy call to make," says a source close to Fu. "It was like calling off a wedding at the last minute, with all the guests in church."

Even worse, from CNOOC's standpoint, Unocal was now preparing to marry someone else. Williamson had told Chevron's O'Reilly that he needed to sweeten his bid further—and include some cash—in order for Unocal's board to approve it. O'Reilly did so, and with CNOOC suddenly sidelined, Chevron was in the driver's seat. Unocal's board in Los Angeles met into the wee hours on April 3. At 4:30 a.m., O'Reilly and Williamson signed a merger agreement.

Meanwhile, at Courtis' urging, CNOOC's board insisted on hiring an outside investment bank—NM Rothschild & Sons—and an energy consulting firm to do their own independent evaluation of the deal, in the hope that the board and Fu might eventually find some common ground. But Schurtenberger wasn't going to stick around for the results. On April 4, he submitted his resignation from the board in writing, citing health reasons. (He has had prostate cancer for many years.) When Courtis failed to appear on the dais at the annual shareholders' meeting the next month in Hong Kong, it caused a stir. Had he resigned too? The first question to Fu from the small audience of Chinese journalists in attendance was, "Where is director Courtis?" Fu smiled and said, "His plane from London was late, it just got here. He'll be at the board meeting that follows."

The independent reports came in. One source describes their findings as "explanatory for the most part, not strongly endorsing a deal, but not entirely negative, either." Fu put the matter to the board again. Courtis, who had not resigned, was now in a difficult position. Advisers to CNOOC have said he still had reservations about the deal. But his employer, Goldman Sachs, had been hired by CNOOC as its investment adviser and stood to reap a significant reward for its efforts only if the deal went through. When it came time for another board vote, Courtis recused himself. Henkes, critically, did not oppose it, and neither did anyone else on the board.

CNOOC was back in the hunt, with a gold-plated army of advisers behind it. Besides Goldman Sachs and JPMorgan, the company had hired Akin Gump Strauss Hauer & Feld, one of Washington's pre-eminent lobbying firms, as well as the same media consulting company that has worked for George W. Bush's two presidential campaigns. Finally, with his board's backing, Fu on June 22 announced its $18.5 billion all-cash bid for Unocal. "It's the superior offer and I believe we'll prevail," he told TIME in early July. His advisers insist that's not bravado. "He really thinks we're going to win this thing," says one of his bankers.