Bloomberg News

PetroChina Unit, KazMunaiGaz to Pay $3.3 Billion for Kazakh Oil

April 24, 2009

PetroChina Co. (857), Asia’s biggest crude oil producer, and Kazakhstan’s state-owned KazMunaiGaz National Co. plan to pay $3.3 billion to buy AO Mangistaumunaigas, China National Petroleum Corp. said.

Mangistau Investments B.V., a 50-50 joint venture formed by PetroChina’s unit CNPC Exploration & Development Co. and KazMunaiGaz, will purchase all the shares in Mangistaumunaigas, China National said in a statement on its Web site today. The price of the transaction is subject to change before the deal is completed, said China National, PetroChina’s parent.

China and Kazakhstan signed 11 accords last week and agreed on $10 billion in loans to the Central Asian nation in return for the right to invest in Mangistaumunaigas. PetroChina will pay “no more than $1.4 billion” for the 50 percent stake in Mangistaumunaigas, Chairman Jiang Jiemin said in an interview on April 16.

“The deal is a major step in strengthening the long-term Sino-Kazakh partnership in oil and gas, and will help China National to further expand its overseas operations,” China National said in the statement. CNPC Exploration is a 50-50 joint venture between PetroChina and its parent.

Mangistaumunaigas has the rights to explore and develop 15 crude oil and natural gas fields in Kazakhstan, the biggest energy producer in the former Soviet Union after Russia, China National said. Mangistaumunaigas held recoverable oil reserves of about 370 million barrels as of the end of 2008. Mangistaumunaigas’s “geological natural gas deposits” reached 41.8 billion cubic meters, China National said.

Mangistaumunaigas also has licenses to explore some offshore fields in Caspian Sea.

Citigroup Inc. is China National’s financial adviser for the acquisition, the Chinese oil producer said in today’s statement.

To contact the reporter on this story: Eugene Tang in Beijing at

To contact the editor responsible for this story: Amit Prakash in Singapore at

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