Court Ok's PetroKazakhstan sale to CNPC
(Agencies)
Updated: 2005-10-26 14:46

China National Petroleum Corp, the nation's largest oil company, won Canadian court approval for a $4.18 billion takeover of PetroKazakhstan Inc., ending months of maneuvering by its rivals for the oil and gas fields in Kazakhstan.

The $4.2 billion takeover of PetroKazakhstan by Chinese oil company CNPC has won approval from a Canadian court in Alberta, PetroKazakhstan announced Wednesday.

Calgary-based PetroKazakhstan said on Wednesday it intended to close the deal with CNPC later in the day.

China National Petroleum Corp's rivals for PetroKazakhstan, whose fields are located in Kazakhstan, included Russian Lukoil and Oil & Natural Gas Corp of India.

The court approval to the bid dealt a blow to Russian oil major and rival suitor LUKOIL. LUKOIL had asked the court in the Canadian province of Alberta to block the CNPC deal because it said it had pre-emption rights to buy a 50 percent stake in Turgai Petroleum, a 50/50 joint venture between LUKOIL and PetroKaz.

"This is a streetwise deal that will be an ongoing showcase," said Winson Fong, who manages $1.95 billion for SG Asset Management in Singapore. "That may boost the confidence for many other state-owned companies and provide experience on how to close a deal to acquire assets overseas."

Kazakhstan's government has already given its blessing to the CNPC deal and has agreed to buy 33 percent of PetroKazakhstan for $1.4 billion. The government and CNPC will also share the firm's Shymkent refinery.

LUKOIL already agreed this month to spend $2 billion on Nelson, another Toronto-listed Kazakh producer. 

In August, China’s largest offshore oil company CNOOC Ltd. abandoned an $18.5 billion bid for American UNOCAL Corp, under political opposition in the U.S. Congress.

It is reported that China National Petroleum Corp has agreed to sell a 33 percent stake in PetroKazakhstan to Kazakhstan's state-owned oil company in an attempt to ease government opposition to the purchase.