If Chevron Corp. hopes to beat Chinese oil company CNOOC Ltd. in the fight for Unocal Corp., it will have to raise its $16.5 billion bid, several big Unocal shareholders said in interviews and communications to Unocal's board.

The shareholders speaking out, who are a minority of the company's stockholders, said they do not think CNOOC's bid presents any threat to U.S. national security and are confident that the Bush administration, which will have final say on the security issue, would not block a deal by the Chinese company to buy California-based Unocal.

They said they consider vocal opposition to CNOOC's bid on Capitol Hill to be bluster from members eager to score political points. And they said the ultimate decision-makers at the Committee on Foreign Investment in the United States (CFIUS) and in the White House will not want to jeopardize a trade relationship with China that is enormously lucrative for many U.S. corporations.

"While the announcement of CNOOC's bid for [Unocal] has become politicized, we hope this debate does not cause the board to conclude that a transaction with CNOOC is not likely to be reasonably consummated," Peter Schoenfeld, chief executive of P. Schoenfeld Asset Management LLC, wrote in a recent letter to Unocal's board. Schoenfeld said in the letter that his firm controls 650,000 Unocal shares, or about 0.2 percent.

"To date, CNOOC's behavior indicates that it is willing to work actively to solve any regulatory hurdles that a potential deal with [Unocal] may face. Furthermore, a review of precedent cases before [CFIUS] indicates that the committee has not treated acquisitions of commodity producers, such as oil and gas, by foreign entities as a national security concern," Schoenfeld wrote.

Chevron spokesman Don Campbell said the company thinks its current offer of cash and stock is superior to CNOOC's all-cash $18.5 billion offer. "We believe our transaction gives Unocal shareholders regulatory certainty, quick completion and long-term investor value."

Another person close to Chevron said opponents of Chevron's offer are mainly short-term Unocal investors, such as hedge funds and merger-arbitrage specialists who look to capitalize when stocks rise during a bidding war. Indeed, the Unocal shareholders willing to discuss the takeover fight mainly come from hedge funds and merger-arbitrage firms. Two of Unocal's biggest institutional shareholders, Dodge & Cox, which owns about 23 million shares, and the Capital Group Cos., which owns more than 30 million, declined to comment Wednesday.

The person, who spoke on the condition of anonymity because he is not authorized to speak for the company, said Chevron's current bid has more value for long-term holders because the stock portion of the deal would be tax-free, Chevron pays a regular dividend and Chevron's stock is likely to rise once a deal is completed. In addition, the person said Chevron's bid offers investors continued holdings in the energy sector while CNOOC's would not.

In interviews Wednesday, Unocal shareholders said they do not think Chevron will have to match any final offer from CNOOC, due to the political sensitivity surrounding the Chinese offer and the length of time it could take to close a deal. But they said Chevron would have to come within $2 or $3 per share of CNOOC's offer.

Chevron shares closed at $57.16 on Wednesday, making the company's offer worth about $60.41 per Unocal share. CNOOC's bid is worth $67 per share. Unocal shares, which have been rising in anticipation of a bidding war, closed at $65.02.

The Unocal shareholders said they do not think the rhetoric from Congress reflects the administration's view of the CNOOC bid. "If you listen to all the noise from Capitol Hill, as loud as it is, it's all coming from pretty much the same people," said an executive at one firm that owns Unocal shares. The shareholder, along with four others interviewed Wednesday, spoke on the condition of anonymity because his firm typically does not comment on its holdings.

The shareholder said he gave more weight to recent favorable comments about China from Treasury Secretary John W. Snow, who would chair a CFIUS review, and from Federal Reserve Chairman Alan Greenspan and Secretary of State Condoleezza Rice.

Another shareholder called the argument that CNOOC's bid could pose a threat to the United States "absurd." He said CNOOC has given repeated assurances that oil produced in the United States would continue to be sold in the United States and that the company would be willing to sell any assets the U.S. government might consider strategic. "In my view, the chance that this could get derailed by CFIUS is extremely remote," the shareholder said.

The shareholder added that if the two bids were the same, he would prefer Chevron's because Chevron could close a deal almost immediately while a CNOOC deal would probably not close until the end of the year.

Unocal board members, who have recommended that shareholders endorse Chevron's bid, are considering CNOOC's offer. They are expected to make a decision sometime next week.

Under terms of the agreement with Chevron, if Unocal's board decides to endorse CNOOC's offer, it must give Chevron written notice, including full terms of CNOOC's winning bid. It must then give Chevron three business days to respond before making a new recommendation.

Chevron would have several options. The company could concede to CNOOC and walk away, it could raise its offer, or it could push forward with a shareholder vote set for Aug. 1o on its current bid.

Unocal shareholders interviewed Wednesday said they thought Chevron would not push for a vote on the current offer but would instead raise its offer closer to CNOOC's. The shareholders said Chevron could wait until July 27 to notify Unocal shareholders of a new offer and still hold the Aug. 10 vote.

The question then would be how much higher CNOOC would go. Unocal shareholders said the fact that CNOOC's shares are rising could embolden the company. "They bid $67 and their stock shot up," said one. "Would their investors crucify them if they bid $70? I don't think so."