PetroChina,
the nation's biggest oil producer, is in talks with its parent
company about buying PetroKazakhstan Inc. assets through a joint
venture, the Hong Kong-listed oil company announced on Friday.
The transaction had been widely expected in the market since
PetroChina's parent company, China National Petroleum Corp (CNPC), took over
PetroKazakhstan for US$4.2 billion earlier this year.
PetroChina has the priority right to buy non-Chinese assets held
by state-owned CNPC, it said in a statement to the Hong Kong Stock
Exchange yesterday.
"The company (PetroChina) has approached CNODC (China National
Oil and Gas Exploration and Development Corp) to discuss the
possible acquisition of interests in PetroKazakhstan," PetroChina
said. CNODC is a wholly-owned unit of Beijing-based CNPC.
No formal decision, however, has been reached by the board, the
statement said.
PetroKazakhstan's headquarters are in Calgary, Canada, but all
its operations are in the central Asian republic of Kazakhstan. It
produced 150,000 barrels per day last year and has proven and
probable reserves of 535 million barrels.
PetroChina has been in strenuous efforts to expand overseas
assets to offset its stagnant domestic output.
In June, the oil producer paid US$2.5 billion for its parent
company's overseas assets, including oil fields in 10 countries,
mostly in Kazakhstan, Peru and Venezuela. PetroChina also formed a
50-50 joint venture, named Newco, with CNPC.
PetroChina would acquire PetroKazakhstan via Newco, which is the
firm's overseas acquisition platform.
Industry analysts said although the possible deal would boost
PetroChina's production and reserves by only up to 3 percent, it
marks an important step to increase its overseas portfolio.
(China Daily December 17, 2005)