Influential proxy firm Institutional Shareholder Services (ISS) on Monday recommended Unocal Corp. shareholders vote for a merger with Chevron Corp., citing the “highly uncertain” nature of the offer by China Offshore Oil Co. Ltd. (CNOOC). Unocal shareholders will vote on Chevron’s $17 billion cash-and-stock offer Aug. 10.

ISS, which provides proxy voting and corporate governance services, analyzes proxies and issues research and vote recommendations for more than 33,000 companies. It noted that it would evaluate a higher bid from CNOOC if one was issued.

CNOOC, which has offered Unocal $18.5 billion in cash, has faced strong opposition in the United States, and it reportedly may abandon its bid or seek a U.S. partner to take over Unocal’s domestic assets. According to a report in The Wall Street Journal Monday, CNOOC may drop its offer for the El Segundo, CA-based producer this week.

CNOOC’s strongest public opposition has been from Congress, and some lawmakers on Monday reiterated their disapproval of the bid, citing the Chinese government’s involvement in the financing arrangements.

“When foreign firms compete for assets in the U.S., it is essential that they do so on a level playing field with U.S. companies,” said Sen. Evan Bayh (D-IN). “Government subsidies tilt this playing field, and, in doing so, distort competition. This harms U.S. workers, companies and investors.”

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