Kazakhstan to Decide on Vetoing Sale of Canada-Owned Oil Firm to China
Posted on: Wednesday, 7 September 2005, 03:01 CDT
Text of report by Interfax-Kazakhstan news agency
Astana/New York, 6 September: The Kazakh government is soon to make public its position on the sale of the shares of [Canadian oil company] PetroKazakhstan, which owns assets in the country.
"This issue is still being discussed. We will give you the answer within seven-ten days," First Deputy Energy and Mineral Resources Minister Baktykozha Izmukhambetov told journalists in the government building today, in response to the question from the media.
As is known, Kazakh legislation gives the state a priority right to buy oil and gas assets located in the country if they are put on sale. Experts have doubted that the state would use this right in the case of PetroKazakhstan.
Energy and Mineral Resources Minister Vladimir Shkolnik has said that Kazakhstan may use its priority right to buy PetroKazakhstan.
PetroKazakhstan said in mid-August that the agreement had been reached with the CNPC International Ltd. (a subsidiary of the Chinese CNPC) which is expected to buy all the ordinary shares of PetroKazakhstan at a price of 55 dollars per share. The deal is estimated to total 4.18bn dollars.
The agreement has been approved by the board of directors of PetroKazakhstan and the CNPC. PetroKazakhstan's board of directors recommended that shareholders should accept the proposal. A general meeting of shareholders is expected to be held in October.
A source has told the Interfax-Kazakhstan news agency that the government received representatives of the Chinese company in Astana in late August. No official report on this meeting has been made by either Kazakh or Chinese sides. It is not known what was discussed at this meeting.
PetroKazakhstan Inc., headquartered in Canada, is an integrated international energy company which explores, extracts, exports and processes oil and sells petroleum products. The company is developing the Kumkol group of oil fields in southern Kazakhstan, and owns the country's three oil refineries, including the Shymkent oil refinery (also in the south).
The Wall Street Journal has reported that having agreed to buy the whole of PetroKazakhstan, the CNPC is conducting talks to sell from 33 to 50 per cent of its shares to the KazMunayGaz national oil and gas company.
According to the newspaper's sources, the sides may conclude an agreement within several weeks.
A spokesman for the CNPC has said that there have been no such talks, and the Kazakh side has refused to comment on this.
According to the Wall Street Journal, this deal may become another example that hydrocarbons-rich countries are gaining increasingly bigger control over their energy reserves.
Source: BBC Monitoring Central Asia
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