CITIC completes Kazakh oil acquisition

Jan 02, 2007 01:00 AM

China International Trust & Investment Corp. (CITIC) completed a $ 1.9 bn oil asset purchase in Kazakhstan after agreeing to sell half a stake to KazMunaiGaz to win the Central Asian government's approval for the acquisition.
CITIC Group, as Beijing-based China International is known, bought the assets from Nations Energy Co., unit CITIC Resources Holdings said. CITIC Group has granted state-run KazMunaiGaz an option to buy 50 % of the asset.

State-owned CITIC Group agreed in October to buy an oilfield in Kazakhstan that pumps 50,000 barrels of oil a day and holds the equivalent of more than 340 mm barrels of oil. Kazakh President Nursultan Nazarbayev wants international companies that buy into the nation's oil industry to include KazMunaiGaz as a partner.
The option for KazMunaiGaz to acquire 50 % is exercisable within one year and the price is based on CITIC Group's acquisition price.

CITIC Resources is tapping rising energy demand in China where the economy has expanded 10.7 % in the first three quarters of last year. The company, an energy and metals producer, bought 51 % of an Indonesia oilfield for $ 97 mm, gaining access to 39 mm barrels of gross oil reserves, it said in July.
Chinese and Russian oil producers are competing for deposits in neighbouring Kazakhstan, which has about 3.3 % of the world's crude reserves. China National Petroleum Corp. last year beat Moscow-based LUKoil to buy PetroKazakhstan in China's biggest energy takeover.

China National this year sold a third of the unit to KazMunaiGaz to seal the acquisition. Kazakhstan has 35 bn barrels of discovered oil reserves and may hold about three times more, according to a government report distributed Nov. 18 in London.
The Kazakhstan government hasn't demanded controlling stakes from foreign companies, unlike Russian President Vladimir Putin, whose government last December took over a majority stake in the Sakhalin-II oil and gas venture from Royal Dutch Shell.

Source: Xinhua
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