Energy News  
Russian, Chinese Firms Battle For Oil In Kazakhstan


Moscow (AFP) Nov 1, 2005
A battle between Russian oil giant Lukoil and China's CNPC for control of key energy assets in Kazkhstan intensified last week with both sides deploying lawyers to fight for holdings in the energy-rich Central Asian country.

Positioned midway between Russia and China, Kazakhstan has the highest proven oil reserves anywhere in the Caspian Sea region and is regarded as one of the most important potential sources of new crude oil supplies to world markets.

The state-run CNPC, spurred by soaring Chinese demand for petroleum, won a key victory when a court in Canada gave approval on Wednesday to CNPC's purchase of the Canada-registered firm PetroKazakhstan for a price of 4.18 billion dollars.

The deal was a setback for Lukoil, which had petitioned a court in the Canadian province of Alberta to block the acquisition on grounds that Lukoil had a preemptive right to take full control of Turgai Petroleum, a subsidiary jointly owned by Lukoil and PetroKazakhstan.

CNPC's purchase of PetroKazakhstan included the latter's 50-percent stake in the Turgai venture with Lukoil, and the Chinese company has shown little sympathy for Lukoil's assertion that the sale of PetroKazakhstan means Lukoil has automatic entitlement to the other half of Turgai.

But it was only on the eve of the Canadian court decision that Lukoil unveiled its true aims in the saga, announcing that it was prepared to match CNPC's bid for PetroKazakhstan, which produces 150,000 barrels per day, or around 12 percent of oil production from Kazakhstan.

"Lukoil wants to be a leader in international oil projects in Kazakhstan, but CNPC has just given it some stiff competition," explained Valery Nesterov, an energy analyst with the Troika Dialogue investment firm in Moscow.

Lukoil, currently in the process of paying two billion dollars for the firm Nelson Resources, which pumps one percent of Kazakhstan's oil, has served notice that it will continue to fight to take take its stake in Turgai from 50 percent to 100 percent.

The Russian firm has already launched legal procedings on the same issue with the Stockholm court of arbitration.

CNPC, which was forced at the last minute to agree to cede one-third of the shares in PetroKazakhstan to the Kazakh government which wants to retain control of the country's strategic energy assets, has taken a dim view of the moves by Lukoil and has launched a counteroffensive.

The Chinese company has said it is prepared to go to court to demand preemptive rights of its own to a 50 percent stake in the North Buzachi oil field under joint development by Nelson Resources and CNPC.

"Nelson takes the position that no such preemptive right exists in the current circumstances," the company said in a statement on Friday.

Analysts said there was more than meets the eye to the CNPC counter-attack.

"What CNPC is doing is a response to the actions of Lukoil," Nesterov said. "You could call it blackmail."

He noted however that while the government of Kazakhstan is "politically and historically closer to Russia, and is wary of China," it nonetheless believes that "its interest lies in a diversification of investments and export routes."

At present, the only pipeline that carries Kazakh crude to the world market is that of the Caspian Pipeline Consortium (CPC), which transits through Russia.

But the launch next year of the Atassu-Alashanku pipeline will reduce this dependence by providing a route for export of Kazakh oil directly to China.

Kazakhstan currently produces around 1.3 million barrels per day of crude and the government plans to raise that to 3.5 million barrels per day by 2015.

Community
Email This Article
Comment On This Article

Related Links
SpaceDaily
Search SpaceDaily
Subscribe To SpaceDaily Express
Powering The World in the 21st Century at Energy-Daily.com



Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


Europe Debates Nuclear Energy
Washington (UPI) Jan 11, 2006
European Union countries are starting to rethink their opposition to nuclear energy amid a dispute between Russia and Ukraine over natural gas supplies, but energy analysts say a switch still lacks a green light.







  • Harnessing The Sun: NASA Studies Advanced Solar Cells On Station
  • Oil Firms Under Pressure From Consumers
  • Russian, Chinese Firms Battle For Oil In Kazakhstan
  • Wal-Mart To Go Solar To Save Energy

  • Duke Power May Build Nuclear Power Plants
  • Innovative 'Recycling' Project Could Reduce US Inventory Of Spent Nuclear Fuel
  • Feds Unveil Yucca Mountain Cleanup Plans
  • US Congress Wants Landmark Nuclear Deal With India To Be Transparent

  • Getting To The TOPP Of Houston's Air Pollution
  • Scientists Seek Sprite Light Source



  • Farm Talks Collapse In Geneva
  • Defeating The 'Superpests'
  • Crop Scientists Improve "Supergrain" For Impoverished Farmers
  • Gourmet Space Dinner On Greenland Icecap

  • GM Hires Russian Nuclear Scientists To Develop New Auto Technology
  • Japan Creates The World's Fastest Electric Sedan
  • Motorists To Pay 'Congestion' Charge Over Broader Swath Of London
  • Solar Cars Driving Towards A Hydrogen Future

  • Manufacturing Academy - Big Boost for Aerospace
  • New Processor Makes Strike Eagle More Lethal
  • Italian Defense Minister High On Eurofighter
  • Pentagon Announces Possible Pilot Training Contract With Taiwan

  • NASA plans to send new robot to Jupiter
  • Los Alamos Hopes To Lead New Era Of Nuclear Space Tranportion With Jovian Mission
  • Boeing Selects Leader for Nuclear Space Systems Program
  • Boeing-Led Team to Study Nuclear-Powered Space Systems

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2006 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA PortalReports are copyright European Space Agency. All NASA sourced material is public domain. Additionalcopyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement