Bronco_Beerslug
08-22-2005, 09:13 AM
Wonder what is next, the Chinese start buying oil leases in Canada?
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Chinese Company Buys Kazakh Oil Interests for $4 Billion
By KEITH BRADSHER
Published: August 22, 2005
HONG KONG, Aug. 22 - China's biggest state-owned oil company agreed today to pay $4.18 billion for a Canadian oil company with substantial reserves in Kazakhstan, China's largest foreign acquisition yet.
The China National Petroleum Corporation outbid India's state-owned Oil and Natural Gas Corporation in reaching a deal to acquire PetroKazakhstan. The bidding underlined growing competition for oil resources by the world's two most populous countries, both of which are rapidly increasing their oil imports.
PetroKazakhstan's acceptance of the C.N.P.C. bid is a consolation prize for China's oil industry nearly three weeks after another state-controlled Chinese company, Cnooc Ltd., withdrew its $18.5 billion offer for Unocal following strong opposition in the United States Congress.
Cnooc and the third of China's three state-owned oil giants, Sinopec, had also tried and failed to buy into Kazakhstan's huge Kashagan field two years ago.
Today's transaction dwarfs what had been the biggest overseas Chinese acquisition so far, Lenovo's purchase of I.B.M.'s personal computer unit for $1.25 billion, completed in May.
Shares of PetroKazakhstan opened up $9.10, or 20 percent, to $54.50 in New York trading this morning.
PetroKazakhstan, based in Calgary, Alberta, but managed from Windsor, England, is a considerably smaller company than Unocal, and it does not have Unocal's extensive natural gas reserves or Unocal's reputation for high technology. It nonetheless commanded a price of $55 a share in today's deal, a premium of 21.1 percent to the stock's closing price on the New York Stock Exchange on Friday.
In the oil industry, "China has consistently been willing to overpay for assets; it's more of a security issue for them than the absolute price," said John Kuzmik, a partner and China specialist at Baker Botts, a big Houston energy law firm. India's Oil and Natural Gas Corporation reportedly bid $3.6 billion.
PetroKazakhstan's main asset lies in its full ownership of one oil field, Kumkol South, and half-ownership of two smaller ones, Kumkol North and Germunaigazof, and in the company's ability to develop those fields even though they are locked in the heart of Central Asia. "It is a jewel; you look at the way they increased production," said Vincent Noual, a specialist in Central Asian oil in the Geneva offices of IHS Energy, a big consulting firm.
(CONTINUED)
http://tinyurl.com/dk7u4
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Chinese Company Buys Kazakh Oil Interests for $4 Billion
By KEITH BRADSHER
Published: August 22, 2005
HONG KONG, Aug. 22 - China's biggest state-owned oil company agreed today to pay $4.18 billion for a Canadian oil company with substantial reserves in Kazakhstan, China's largest foreign acquisition yet.
The China National Petroleum Corporation outbid India's state-owned Oil and Natural Gas Corporation in reaching a deal to acquire PetroKazakhstan. The bidding underlined growing competition for oil resources by the world's two most populous countries, both of which are rapidly increasing their oil imports.
PetroKazakhstan's acceptance of the C.N.P.C. bid is a consolation prize for China's oil industry nearly three weeks after another state-controlled Chinese company, Cnooc Ltd., withdrew its $18.5 billion offer for Unocal following strong opposition in the United States Congress.
Cnooc and the third of China's three state-owned oil giants, Sinopec, had also tried and failed to buy into Kazakhstan's huge Kashagan field two years ago.
Today's transaction dwarfs what had been the biggest overseas Chinese acquisition so far, Lenovo's purchase of I.B.M.'s personal computer unit for $1.25 billion, completed in May.
Shares of PetroKazakhstan opened up $9.10, or 20 percent, to $54.50 in New York trading this morning.
PetroKazakhstan, based in Calgary, Alberta, but managed from Windsor, England, is a considerably smaller company than Unocal, and it does not have Unocal's extensive natural gas reserves or Unocal's reputation for high technology. It nonetheless commanded a price of $55 a share in today's deal, a premium of 21.1 percent to the stock's closing price on the New York Stock Exchange on Friday.
In the oil industry, "China has consistently been willing to overpay for assets; it's more of a security issue for them than the absolute price," said John Kuzmik, a partner and China specialist at Baker Botts, a big Houston energy law firm. India's Oil and Natural Gas Corporation reportedly bid $3.6 billion.
PetroKazakhstan's main asset lies in its full ownership of one oil field, Kumkol South, and half-ownership of two smaller ones, Kumkol North and Germunaigazof, and in the company's ability to develop those fields even though they are locked in the heart of Central Asia. "It is a jewel; you look at the way they increased production," said Vincent Noual, a specialist in Central Asian oil in the Geneva offices of IHS Energy, a big consulting firm.
(CONTINUED)
http://tinyurl.com/dk7u4