CNOOC, the state-owned Chinese oil company, is struggling to keep its $18.5 billion bid for Unocal of the US alive amid mounting concerns that political opposition and Chevron's rival bid may force the Chinese company to withdraw its offer.

CNOOC is likely to make a decision within the next 48 hours and announce it by Wednesday.

After four days of meetings between executives, directors and advisers, people close to the situation denied reports that CNOOC had already decided to abandon the biggest, and most ambitious, takeover attempt by a Chinese company.

However, they warned that an improved bid of some $20 billion by CNOOC seemed increasingly unlikely to defeat both Chevron's $17.3 billion offer and opposition in Washington.

"Nothing has been decided but the chances of an increased bid are about 30 per cent now," said a person close to the situation. "It is not a matter of having the money or the will, it is a question of whether the political situation is becoming untenable."

Investors are due to vote on Chevron's cash-and-shares offer on August 10th, leaving little time for CNOOC to persuade Unocal's board and shareholders to back its bid.