China Oil Co. to Acquire PetroKazakhstan

[phantom power]

August 22,2005 | BEIJING -- China's biggest state-owned oil firm announced Monday that a major oil producer in neighboring Kazakhstan has accepted a $4.2 billion takeover -- a victory in Beijing's campaign to secure foreign energy supplies for its booming economy.

The acquisition of PetroKazakhstan Inc., a Canada-based company, by China National Petroleum Corp. International Ltd., a wholly owned subsidiary of China National Petroleum Corp., comes just three weeks after state-controlled CNOOC Ltd. dropped its bid for U.S. producer Unocal Corp. following opposition from American critics.

The deal, which still requires the approval of PetroKazakhstan's shareholders, would be the biggest acquisition yet in a string of Chinese corporate takeovers overseas.

CNPC agreed to pay $55 per share -- a 21 percent premium over PetroKazakhstan's closing stock price on Friday. Shares of PetroKazakhstan climbed $8.50, or 19 percent, to $53.90 on the New York Stock Exchange. The stock's strongest level of the day was $54.52, well above its previous 52-week high of $46.92.

http://www.salon.com/wire/ap/archive.html?wire=D8C4VT4O0.html

[Maple]

1. Yaaaaaaaaaaaaaaay Canada!

[Gloria]

2. Related story...we are really down the tubes in Central Asia...

Uzbekistan media is now against the US...Russia back in favor in the region...


http://www.eurasianet.org/departments/business/eav081505ru.shtml



REBUFFED BY WASHINGTON, CHINA GOES PROSPECTING IN KAZAKHSTAN
Alec Appelbaum 8/15/05



With access to energy investment opportunities in the United States blocked for political reasons, China is turning its attention to Kazakhstan.

Kazakhstan’s energy players have long courted Chinese investment. Now -- following the failed attempt by the Chinese government-controlled oil giant, China National Offshore Oil Co. (CNOOC) Ltd, to acquire the American-based Unocal – Beijing is looking for a more politically friendly environment in which it can secure a steady supply of energy for the country’s fast-growing economy.

CNOOC offered $18.5 billion for Unocal in late June, over $1 billion more than a proposal from Chevron Corp. The attempted Chinese purchase generated fierce political opposition in Washington, and CNOOC eventually abandoned its acquisition effort in early August. In withdrawing its offer, CNOOC said in a statement that strong US political opposition created "an unacceptable risk to our ability to secure this transaction."

With the demise of the Unocal deal, Kazakhstan looks increasingly attractive as a Chinese energy investment destination. In addition to CNOOC, other large state-owned energy entities, such as PetroChina, are cash-rich and on the lookout for takeover targets.

"The Chinese are already active in Kazakhstan and have had more upstream opportunities here in their sights for a long time," echoes Julia Nanay, a senior director with Washington’s PFC Energy consultancy. China’s various stakes in Kazakhstan fields amount to "more than enough" as a production base, according to another analyst, who spoke on condition of anonymity because his employer makes intricate investments in various Central Asian companies.

Helping to spur Chinese-Kazakhstani energy cooperation, the 988-kilometer-long Atasu-Xinjiang pipeline is scheduled to become operational in late 2005. Chinese and Kazakhstani officials have also mulled the construction of a cross-border natural-gas connection that would link to China’s West-East pipeline, which stretches from Western Xinjiang Province to Shanghai.

The pending sale of PetroKazakhstan, a Canadian company with a stock market worth of roughly $3.2 billion, will offer analysts a quick way to gauge China’s determination to raise its profile as a Central Asian energy player. Throughout the summer, PetroKazakhstan, which has had an occasionally contentious relationship with the Kazakhstani government, has mulled takeover offers from a variety of suitors. . The heftiest, according to published reports, have come from Russian-owned Lukoil and PetroChina, the parent of Beijing’s biggest oil company. On August 14, Indian officials confirmed that the state-run Oil and Natural Gas Corp. had also submitted a bid, reportedly in the $3.5-billion range.

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[phantom power]

4. It's funny, how things like this happen...

when you spend five years just generally pissing on the rest of the world.

[Double T]

3. Get your bicycles dusted off and tuned up......

China is out to take over the world's oil supply without firing a shot.

[Oerdin]

5. What I don't like about this.

Is that this is a company directly owned and controlled by the Chinese government and that it is massively subsidized by the Chinese government for the expressed purpose of aquiring oil rights around the world. I opposed the proposed deal to buy Union Oil of California (UNOCAL) not because the company was Chinese but because the company is completely owned by the Chinese government solely for the benefit of the Chinese government. I support proposed deals where private Chinese companies invest over seas but I get very nervous about the Chinese government buying up strategic assets.