BEIJING - China
National Petroleum Corporation (CNPC), the
nation's largest oil producer, said October 18
that it had reached an agreement with Kazakhstan
over the fate of Canadian-registered oil firm
PetroKazakhstan.
In order to get the
Kazakhstan Government to agree to CNPC's purchase
of PetroKazakhstan, the Chinese firm has agreed to
sell state-owned KazMunaiGas part of the Canadian
firm. "CNPC signed an agreement with KazMunaiGas
last week," Liu Weijiang,
a
CNPC spokesman, told China Daily October 18,
declining to elaborate further. A source close to
CNPC said the agreement could involve selling
equity stakes of PetroKazakhstan to KazMunaiGas.
Sources said the Beijing-based oil
conglomerate has agreed to sell a US$1.4 billion
stake in PetroKazakhstan to the Kazakhstan
government in a move to win support for the deal,
originally scheduled to be closed by today. This
reportedly amounts to a 33% stake. Shareholders of
PetroKazakhstan will vote on the acquisition
today, and CNPC will then make an announcement,
Liu told China Daily.
CNPC in August said
it had agreed to buy Calgary Canada-based
PetroKazakhstan, which produces about 12% of the
crude output from Kazakhstan, for $4.18 billion.
The central Asian country, which receives 80% of
its income from oil, has plans to triple crude
output by 2015. If successful, the deal will be
China's largest cross-border transaction. China
last year produced 174 million tons of crude oil,
and imported 122 million tons.
On October
15, Kazakh President Nursultan Nazarbayev agreed
to a change in the law that will let his
government bodies interfere with sales of oil and
gas companies, according to a Reuters report.
Kazakhstan had said it opposed the CNPC takeover
because PetroKazakhstan did not inform it about
the deal, and because the government wanted to
secure control over some of PetroKazakhstan's
assets. These include the Shymkent oil refinery,
one of three oil processing plants based in the
central Asian country.
CNPC started its
overseas expansion activities more than 10 years
ago, and Kazakhstan is the oil giant's second
biggest overseas market following Sudan. China and
Kazakhstan are building a 3,000-kilometer
pipeline, costing $3 billion, to pump crude oil to
China across the Central Asian state, with the
first-phase of the project to be completed by the
end of this year.
PetroChina, the Hong Kong-listed
subsidiary of CNPC, has said that during the first
three quarters of this year, it saw a total output
of 722 million barrels of oil equivalent, an
increase of 5.3% year-on-year. In the first three
quarters, PetroChina's average realized price of
crude oil reached $47.35 per barrel, 50.08% higher
than a year ago.
