CNPC completes acquisition of PetroKazakhstan (Xinhua) Updated: 2005-10-27 20:13 China National Petroleum
Corporation (CNPC) announced Thursday morning it has successfully acquired
Canada-based PetroKazakhstan Inc. (PK) through its wholly-owned subsidiary
CNPCI.
;;Wednesday morning, Canadian time, the China's largest oil producer saw its
planned acquisition of PK through CNPCI was granted "unconditional" final order
by the Queen's Bench Court, Calgary, Canada.
CNPC's bid for PK is 55 US dollars per share, totaling 4.18 billion US
dollars, the largest overseas takeover transaction ever made by a Chinese
company.
Lukoil of Russia, one of CNPC's major rival in the deal made noappeal,
indicating the completion of all legal procedures of the transaction.
To date, the transaction has been completed, announced CNPC.
At local time Wednesday afternoon, Chinese Premier Wen Jiabao met Kazakhstan
Prime Minister Danial Akhmetov in Moscow, when attending the Shanghai
Cooperation Organization Summit.
Both Premier and the prime minister expressed their strong support for the
mutual-benefit cooperation between CNPC and KazMunaiGaz over PK after the
completion of the acquisition.
Kazakh Prime Minister promised to help to resolve all remained problems of PK
in Kazakhstan together with CNPC after the deal is closed.
Early in the shareholders meeting of PK held last Tuesday, 99.04 percent of
all the voting shares were affirmative for the acquisition.
According to relevant transaction procedures, the outcome of the shareholders
meeting needs to be sanctioned by the Canadian court.
However, in the court hearing of last Tuesday, the lawyer of Lukoil claimed
that the company has the first right of refusal to buy a 50 percent stake in
Turgai Petroleum, a joint venture between PK and Lukoil. In this connection, the
Court postponed its ruling to Wednesday.
CNPC and PK concluded the negotiation on August 21 over the transaction with
the signing of the"Arrangement Agreement".
According to CNPC, after two months of heavy workload, all formal approvals
and legal procedures have been obtained and completed. At present, CNPC staff is
working with PK and the hand-over of business is under way. Operation of PK is
maintained as usual, and employees are unaffected.
PK Inc is an international energy company registered in Canada,with all of
its assets, such as oilfields and refineries, in the Republic of Kazakhstan.
PK's total annual production capacity of crude oil exceeds seven million tons.
Since its first presence in Kazakhstan in 1997, CNPC has developed good
relationship with local government by strictly following local laws and
regulations as well as international bestpractices of the industry.
Upon acquisition, in the spirit of win-win and mutual benefit, CNPC will
choose to cooperate with KazMunaiGaz, the state oil company of Kazakhstan to
operate and manage the PK project, said CNPC.
The two parties signed a memorandum of understanding on Oct. 15,according to
which KazMunaiGas will obtain a certain amount of PK shares enough to have
strategic control over the development of the country's mineral resources,
together with the equal right forjoint management over Shymkent refinery and its
products.
PK owns 12 oil fields, and exploration licenses in 6 blocks in Kazakhstan,
with great exploration potential.
CNPC said it is confident that taking advantage of CNPC's strength in
capital, technology and management, as well as CNPC's valuable experience in
Kazakhstan, the production capacity of PK will be increased, and thus provides
the Sino-Kazakhstan oil pipeline expected to be completed at the end of this
year with a reliable supply.
The increase of investment in Kazakhstan and the acceleration of PK's
development will help to ensure the stable supply of oil products of the country
and boost local economy, said the company.
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