CNPC to buy 49 per cent in Kazakh oil major for $10 billion

13 April 2009

China National Petroleum Corp (CNPC), China's largest integrated oil-and-gas company, plans to buy 49 per cent holding in AO MangistauMunaiGaz for $10 billion from Kazakhstan's state-run KazMunaiGaz National Co, a CNPC official said on Monday.

MangistauMunaiGaz, which controls oil reserves estimated at 500 million barrels, has also been eyed by Russian and Indian energy companies in recent months.

The accord is expected to be signed on 15 April when Kazakh president Nursultan Nazarbayev visits Beijing, the official said. Nazarbayev will visit Beijing before attending the Boao Forum, a regional economic summit held on the southern Chinese island of Hainan.

China is seeking to bolster its energy security by sealing long-term deals with neighboring states and reducing its reliance on maritime oil transportation routes.

The nation's oil imports climbed to a one-year high in March, according to customs data. So it makes sense to acquire assets because it's cheaper than buying from abroad.

Kazakhstan is the seccond biggest energy producer in the former Soviet Union.