Unocal, a US oil company, has agreed an improved $17.1bn (€14bn) takeover from Chevron spurning an $18.5bn cash bid from China National Offshore Oil Corporation in the largest oil industry deal in seven years.

Bloomberg reports that Chevron, advised by Lehman Brothers, feels confident its lower offer is more attractive, as US lawmakers will side with a domestic takeover rather than a Chinese state-run company.