Kazakh oil / National Energy - Russia - China - India and territorial / economic dominance

The Kazkah government looked set to approve by the end of December the China International Trust & Investment Corp (CITIC) . bid to $1.9 billion to buy the Kazakhstan oil assets of Canada's Nations Energy Co., The deal is dependent upon several approvals including the waiver of pre-emptive rights of the Kazakh government, which last year amended laws to give it first option on the sale of mineral resources and possibly on corporate deals.

It is further evidence of China's ruthless quest to hoover up oil supplies, to meet their massive growth in demand.

CITIC is reported to be planning a "medium-size'' oil refinery in the Mangistau Oblast region when they have found some strategic Kazakh partners.

CITIC quoted in Hong Kong rose 1% to HK$1.62 , their biggest gain in a year.
www.cnpc.com.cn/english/

However Russian news service Interfax reports (16th Nov) from (old) Kazakh capital Almaty (pic of Statue of Indpendence) that Energy and Natural Resources Minister Baktykozha Izmukhambetov told a committee of the Kazakh parliament that the proposed sale should be blocked and

"We should, or rather I should in the first place, take urgent measures to stop this agreement over Karazhanbasmunai,"

Karazhanbasmunai is the unit of Nations Energy that operates the Karazhanbas oilfield in western Kazakhstan.

Kazakh Channel 13 TV reports (BBC monitoring 16th Nov) that fear of Chinese expansion is today's political fashion. MPs who recently had an outburst of China phobia are setting the tone for xenophobia. Some MPs say that if China continues to buy out Kazakh oil, the republic would soon become merely raw materials appendage to Beijing.

China National Petroleum Corporation (CNPC) acquired Calgary based PetroKazakhstan Inc. in a US$ 4.18 Mn (HK$32.6 billion) deal on October 26th 2005 which bought them the Karazhanbasmunay bloc, the second biggest (known) production asset in Kazakhstan and co-operation with KazMunaiGaz to operate and manage the PK project. It was said at the time that oil hungry India's Oil & Natural Gas Corp was also in the bidding. (see connection to LUKoil below)

Part of the deal involved the development of the Darkhan field in the North caspian 60 Km south of Bautino in working waters of 3-5 metres which is said to have 480Mn Tons of fuel equivalent.

KazMunaiGaz produces about 16 % if Kazakh oil output. It controls 65 % of Kazakhstan's oil transport routes and 100 percent of gas transport pipelines and in 2005 produced
65 million barrels with revenues of t US$4.7 billion (Ђ3.8 billion), 31.4% up on 2004.

Overall Kazakh oil output , says the Oil Ministry, is planned to grow from the current 1.3 million barrels to 3 million barrels a day by 2015, according to the Oil Ministry.

CITIC , quoted in Hong Kong rose 1% to HK$1.62 , their biggest gain in a year.
http://postmanpatel.blogspot.com/search?q=Nursultan+Nazarbayev+embraces

Readers might remember Lord Patel posting about Kazakh President Nursultan Nazarbayev's ambitions on Thursday, April 6 2006
Nursultan Nazarbayev embraces Mother Russia ... and Putin

"Russian state-controlled media, including the RTR television channel and Radio Mayak, report Kazakhstan’s President Nursultan Nazarbayev’s recent three-day visit to Moscow as a potential turning point in Putin’s struggle for control of the Caspian Basin’s oil and gas reserves...."

or

Monday, March 27 2006
Hashim Djojohadikusumo sells Nations Energy to Vagit Alekperov

"Vagit Alekperov told me over the gaming tables in Northern Cyprus that he has his eyes on Nations Energy – a price tag of $2.5Bn is attached. Expect news any day he said."

Two lessons :
1. President Nursultan Nazarbayev plays a long game.
2. So does Hashim Djojohadikusumo and his Indonesian pals, owners of National Energy Ltd (until December)
3. Don't hang around gambling tables and expect to be told the truth, the whole truth .....

A 962-kilometer (598-mile) Atasu-Alashankou pipeline completed in December at a cost of $800 million transports crude to China National's refinery in Dushanzi, close to China's northwestern border with Kazakhstan. Russian state owned Transneft have announced the intention to export 7 million tons (51.3 mln bbl) in 2007, to China on this route. Only this week have Transneft announced the final part of the pipeline from Russia to China with the first leg from Taishet in East Siberia to Skovorodino near the Chinese border to be completed by the end of 2008 for which China will pay US$400 Mn.