HONG KONG -- China National Petroleum Corp. has agreed to buy PetroKazakhstan for $4.18 billion, topping a bid by an Indian producer and securing supplies for the world's fastest-growing major economy.
China National Petroleum agreed to pay $55 a share, or 21 percent more than its closing share price Friday, Calgary-based PetroKazakhstan said in a statement Monday. India's Oil & Natural Gas Corp. also bid for the company.
China's largest overseas acquisition gives it control of 12 percent of output in Kazakhstan, three weeks after Chinese offshore oil developer CNOOC lost an $18.5 billion bid for California-based Unocal. It also marks a victory in a contest for reserves with India as both countries turn to fuel imports to sustain economic growth.
"We're likely to see much more of this in future -- two hungry oil giants bidding for the same assets," said Anders Damgaard, who helps manage $3 billion, including Petrochina shares, at Sydinvest Asset Management in Aabenraa, Denmark.
China's oil fields are failing to meet demand, which more than doubled in the past decade to about 6.75 million barrels per day, according to an estimate by the International Energy Agency. The nation's economy grew at a 9.5 percent rate in the first half and has tripled in size in a decade.
India's Oil & Natural Gas has not given up, chairman Subir Raha said in a telephone interview from Mumbai. "If PetroKazakhstan asks us to make a counter-bid, we will do it," he said. "We are awaiting an official communication from PetroKazakhstan. So far, I have only read it in the media."
Raha declined to say how much his company had offered. "Our bid price was very close" to China's, he said.
India, Asia's third-biggest oil consumer after China and Japan, is set to post the fastest three-year growth in the period ending March 31, 2006, since 1996. The economy is forecast to grow 7 percent this fiscal year. Rising demand for fuels increased India's oil imports 6 percent for the year ended March 31.
China National Petroleum is buying PetroKazakhstan from shareholders including chief executive Bernard Isautier, who led the company, formerly known as Hurricane Hydrocarbons, out of bankruptcy in 2000.
Isautier, 62, would become chairman of a proposed new company, to expand oil and gas ventures in Central Asia, that may seek a separate stock exchange listing.
Among former Soviet states, Kazakhstan is second only to Russia in oil production. Chinese President Hu Jintao in July visited his Kazakh counterpart, Nursultan Nazarbayev, to discuss construction of pipelines to transport oil and gas to China.
Kazakhstan held 3.3 percent of the world's oil reserves at the end of 2004, according to data compiled by BP. The country's 39.6 billion barrels of oil reserves were 35 percent greater than the U.S. total. Kazakhstan produced 1.3 million bpd last year.
China and Kazakhstan are building a 3,000-kilometer pipeline at a cost of $3 billion to carry oil to China across the entire Central Asian state. Landlocked Kazakhstan, which plans to triple oil output by 2015, wants to bypass Russia's pipeline network and get its oil to international markets.
KazMunaiGaz, the Kazakh national oil company, and China National Petroleum are building a section from Atasu, in eastern Kazakhstan, to the Chinese border town of Alashankou. The link will be able to pump 200,000 bpd, about 3 percent of China's demand, from Dec. 16 and the capacity may be doubled later if more crude oil is found, Kazakh Energy Minister Vladimir Shkolnik said June 29.
Chinese companies produce about 140,000 bpd in Kazakhstan, Shkolnik said.
China National Petroleum is the state-run parent of Hong Kong-listed PetroChina. The parent's unit CNPC International would acquire PetroKazakhstan.
PetroChina on June 10 said it planned to form a 50-50 venture with the parent by the end of this year for long-term overseas expansion and managing all existing foreign assets including three major oil and gas fields and a pipeline in Kazakhstan.
Mao Zefeng, a spokesman for the Hong Kong-listed unit, declined to comment on whether the joint venture may take over the PetroKazakhstan assets from the parent.
Cao Yushu, a spokesman at China's National Development and Reform Commission, and Chong Quan, a spokesman at the Commerce Ministry, were not immediately available for comment.
A foreign ministry spokesman said such transactions were commercial business and declined to comment.
PetroKazakhstan's London-traded stock rose 16 percent to 29.625 pounds ($53.23) in early trading.
PetroKazakhstan's board recommended that its shareholders accept the Chinese oil company's offer. The transaction is expected to close in October.
Goldman Sachs is advising PetroKazakhstan, which agreed to pay a $125 million breakup fee. Citigroup Global Markets is the financial adviser to China National Petroleum.
China's biggest takeover to date was Lenovo Group's $1.25 billion purchase of IBM's personal computer unit, completed in May.
PetroKazakhstan, the third-largest oil producer in Kazakhstan, on June 27 said it had been approached by several prospective buyers.
The company's production averaged 151,102 bpd in 2004. KazMunaiGas is the largest oil producer in Kazakhstan, followed by Chevron.
Isautier was hired as CEO in 1999. He bought a refinery in Kazakhstan, and the company emerged from bankruptcy in 2000. The company was renamed PetroKazakhstan in 2003.
Isautier in May said he would retire in September, leaving amid legal disputes with Kazakhstan and LUKoil. He owns 3.1 percent of PetroKazakhstan's stock, worth $126 million.
China National Petroleum agreed to pay $55 a share, or 21 percent more than its closing share price Friday, Calgary-based PetroKazakhstan said in a statement Monday. India's Oil & Natural Gas Corp. also bid for the company.
China's largest overseas acquisition gives it control of 12 percent of output in Kazakhstan, three weeks after Chinese offshore oil developer CNOOC lost an $18.5 billion bid for California-based Unocal. It also marks a victory in a contest for reserves with India as both countries turn to fuel imports to sustain economic growth.
"We're likely to see much more of this in future -- two hungry oil giants bidding for the same assets," said Anders Damgaard, who helps manage $3 billion, including Petrochina shares, at Sydinvest Asset Management in Aabenraa, Denmark.
China's oil fields are failing to meet demand, which more than doubled in the past decade to about 6.75 million barrels per day, according to an estimate by the International Energy Agency. The nation's economy grew at a 9.5 percent rate in the first half and has tripled in size in a decade.
India's Oil & Natural Gas has not given up, chairman Subir Raha said in a telephone interview from Mumbai. "If PetroKazakhstan asks us to make a counter-bid, we will do it," he said. "We are awaiting an official communication from PetroKazakhstan. So far, I have only read it in the media."
Raha declined to say how much his company had offered. "Our bid price was very close" to China's, he said.
India, Asia's third-biggest oil consumer after China and Japan, is set to post the fastest three-year growth in the period ending March 31, 2006, since 1996. The economy is forecast to grow 7 percent this fiscal year. Rising demand for fuels increased India's oil imports 6 percent for the year ended March 31.
China National Petroleum is buying PetroKazakhstan from shareholders including chief executive Bernard Isautier, who led the company, formerly known as Hurricane Hydrocarbons, out of bankruptcy in 2000.
Isautier, 62, would become chairman of a proposed new company, to expand oil and gas ventures in Central Asia, that may seek a separate stock exchange listing.
Among former Soviet states, Kazakhstan is second only to Russia in oil production. Chinese President Hu Jintao in July visited his Kazakh counterpart, Nursultan Nazarbayev, to discuss construction of pipelines to transport oil and gas to China.
Kazakhstan held 3.3 percent of the world's oil reserves at the end of 2004, according to data compiled by BP. The country's 39.6 billion barrels of oil reserves were 35 percent greater than the U.S. total. Kazakhstan produced 1.3 million bpd last year.
China and Kazakhstan are building a 3,000-kilometer pipeline at a cost of $3 billion to carry oil to China across the entire Central Asian state. Landlocked Kazakhstan, which plans to triple oil output by 2015, wants to bypass Russia's pipeline network and get its oil to international markets.
KazMunaiGaz, the Kazakh national oil company, and China National Petroleum are building a section from Atasu, in eastern Kazakhstan, to the Chinese border town of Alashankou. The link will be able to pump 200,000 bpd, about 3 percent of China's demand, from Dec. 16 and the capacity may be doubled later if more crude oil is found, Kazakh Energy Minister Vladimir Shkolnik said June 29.
Chinese companies produce about 140,000 bpd in Kazakhstan, Shkolnik said.
China National Petroleum is the state-run parent of Hong Kong-listed PetroChina. The parent's unit CNPC International would acquire PetroKazakhstan.
PetroChina on June 10 said it planned to form a 50-50 venture with the parent by the end of this year for long-term overseas expansion and managing all existing foreign assets including three major oil and gas fields and a pipeline in Kazakhstan.
Mao Zefeng, a spokesman for the Hong Kong-listed unit, declined to comment on whether the joint venture may take over the PetroKazakhstan assets from the parent.
Cao Yushu, a spokesman at China's National Development and Reform Commission, and Chong Quan, a spokesman at the Commerce Ministry, were not immediately available for comment.
A foreign ministry spokesman said such transactions were commercial business and declined to comment.
PetroKazakhstan's London-traded stock rose 16 percent to 29.625 pounds ($53.23) in early trading.
PetroKazakhstan's board recommended that its shareholders accept the Chinese oil company's offer. The transaction is expected to close in October.
Goldman Sachs is advising PetroKazakhstan, which agreed to pay a $125 million breakup fee. Citigroup Global Markets is the financial adviser to China National Petroleum.
China's biggest takeover to date was Lenovo Group's $1.25 billion purchase of IBM's personal computer unit, completed in May.
PetroKazakhstan, the third-largest oil producer in Kazakhstan, on June 27 said it had been approached by several prospective buyers.
The company's production averaged 151,102 bpd in 2004. KazMunaiGas is the largest oil producer in Kazakhstan, followed by Chevron.
Isautier was hired as CEO in 1999. He bought a refinery in Kazakhstan, and the company emerged from bankruptcy in 2000. The company was renamed PetroKazakhstan in 2003.
Isautier in May said he would retire in September, leaving amid legal disputes with Kazakhstan and LUKoil. He owns 3.1 percent of PetroKazakhstan's stock, worth $126 million.
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