/REUTERS, London/Astana/Bombay/Calgary, August 23, 05/ - PetroKazakhstan Inc does not know about prepared offers, which could make competition to $4.18 bn., offered for it on Monday by Chinese state oil company CNPC, said head of PetroKazakhstan Bernar Izotye.

Deal assumes, that Canadian company cannot demand new offers, however in case of receiving competitive offer it should have to consider it and recommend shareholders, if more profitable is represented, Izotye stressed.

Chinese state oil company CNPC shot ahead in duel with Indian ONGS for control upon oil assets in Kazakhstan, having offered for PetroKazakhstan Inc almost twice as much as the market evaluated purchase a month ago.

However ONGS announced, that as usual intends to become owner of PetroKazakhstan, though now the goal became complicated.

"At present I do not know about any other offer, received by management, consultants or board of directors", - Izotye said to analysts and journalists.

He added, that he is not sure, that government of Kazakhstan will make use of its right to block the deal.

"This may be used in case, if energy assets are sold to the third party instead of the company's shares", - Izotye said. - We are saying... about purchase of PetroKazakhstan. We are not talking about sale of assets, in connection with it proactive rights could be used. We do not expect any problems in this respect".

CNPC in partnership with Kazakhstan state company Kazmunaigas plan in December to complete construction of pipeline with capacity 10-20 m. tons of oil a year in China, and purchase of new oil-bearing assets on Kazakhstan territory is strategically important for CNPC, though volumes of its production - six millions barrels of oil a day - are incommensurable with daily 150.000 barrels of PetroKazakhstan.

Canadian PetroKazakhstan is quarterly owned by Kazakh investors. The company extracts on the south of Kazakhstan at Kumkol field and owns the biggest petroleum refinery in the country.

PetroKazakhstan informed on Monday, that deal, rumors about which are circulating in the market during last weeks, has been already approved by the board of directors of both companies. Shareholders meeting of PetroKazakhstan on the matter about sale to CNPC is expected in October. For approval of the deal two thirds of shareholders should vote for it.

According to announced terms, CNPC will pay $55 per one share of PetroKazakhstan.

"Offer of (CNPC) is a premium in 24.4 percents on the basis of average closing price for the last 20 days and premium in the amount 21.1 percents to closing price on August 19, the last day of trades", - the company's message says, whose shares are traded in Toronto and last year for the first time entered listing of Kazakhstan stock exchange.

Analysts consider, that despite high price, which is ready to be paid by China for Kazakh oil assets, it is strategic investment for CNPC.

"Chinese historically were more aggressive, than Indians, who are still grope their way on international oil arena", - UFG analyst Steven O'Sallivan says.

ONGS IS NOT GIVING UP

India oil ministry in the middle of August informed, that ONGS (Oil and Natural Gas Corp.) submitted application for purchase of PetroKazakhstan, whose market capitalization at that time was estimated in $3,2 bn.

On Monday after information about forthcoming deal of CNPC and PetroKazakhstan ONGS announced, that as usual works on offer about purchase of Canadian company.

"If PetroKazakhstan asks us to break this offer, we will do it", - head of ONGS Subur Raha said to Reuters. But source in Indian government is confident that ONGS will give another application, even if PetroKazakhstan does not ask.

Kazakhstan government recently announced that has right to block deal with assets of PetroKazakhstan as user of national entrails, thus giving hint, that it is main arbiter in selection of buyer. However Cabinet on Monday withheld comments concerning application of Canadian and Chinese companies.

Analysts consider that China has already achieved proper agreement with Kazakhstan government.

"For China in this deal there is specific logic, they continue to strengthen its positions in Kazakhstan, which rapidly increases oil production", - Analyst Atona Steven Dashevski says.

Two other Chinese companies, CNOOC and Sinopec, pretended for purchase of Britain BG in giant oil project Kashagan on Caspian shelf, however other participants of consortium blocked this deal. Stake as a result passed to representative of Kazakhstan represented by Kazmunaigas.

PetroKazakhstan consider itself as object of discrimination: the company was fined for violation of legislation about ecology, involved in suit about violation of antimonopoly laws, a number of managers of PetroKazakhstan subdivisions in April 2005 were accused in overstating of "ceiling" of prices for fuel, established by regulating bodies.

Britain business newspaper Financial Times in June 2005 evaluated market capitalization of PetroKazakhstan in $2.5 bn., but due to rumors about forthcoming sale its shares rapidly grew.

[2005-08-23]