Kazakhstan, most probably, will refuse purchase of PetroKazakhstan's shares in favor of foreign investors - experts

/INTERFAX-KAZAKHSTAN, Almaty, August 23, 05/ - Kazakhstan's government, most probably, will refuse the priority right for purchasing PetroKazakhstan's shares in favor of foreign investors, in particular, China, Dosym Satpayev director of Risks estimation group thinks. "According to existing laws, Kazakhstan has the priority right for purchasing stakes in oil and gas projects, and KazMunayGas has already used it (while purchasing BG's stake in North-Caspian project. - "IF-K"). But here everything depends on who interesting PetroKazakhstan for country's government is. On one hand, this is one of profitable companies and its oil- bearing regions are promising. On the other - there were too many scandals and conflicts about this company", - Satpayev said on Tuesday to "Interfax- Kazakhstan". Before Vladimir Shkolnik minister of energy and mineral resources of Kazakhstan said Kazakhstan could use its priority right for purchasing PetroKazakhstan. However on Tuesday Shkolnik refused to comment the deal PetroKazakhstan-CNPC. "We do not take part in PetroKazakhstan's business. No comments", - he said to "Interfax-Kazakhstan". Satpayev says "nobody doubts that Kazakhstan's governing body is interested in attraction of new investors to country's economy, especially to oil and gas regions". He says before Kazakhstan concentrated in attraction of investors from the West, and "now country's governing body is trying to diversify the staff of foreign participants, attracting Russia, China, India, Iran". "Taking into account the fact that China itself is actively lobbying its interests in Kazakhstan, and if take into account the fact that China's governing body is now very interested in expansion of presence of Chinese business our republic besides Aktobemunaygas and building of oil pipeline West Kazakhstan - West China, - I suppose Kazakhstan's governing body will have a choice among two decisions: either increase Kazakhstan's stake in oil and gas production by purchasing PetroKazakhstan's stake, or expand the staff of participants from among investors, having set more or less long- term projects with China. Most probably, the second position will be chosen", - the expert said. He says, a present KazMunayGas "has serious plans in Caspian sea", and "as regards the south of Kazakhstan, I think it will be profitable for country's governing body to attract an additional investor in the person of China". "It's very important for China now to join the southern Kazakhstan oil and gas projects in order to use PetroKazakhstan's capacities in the future for additional filling of this future oil pipeline (West Kazakhstan - West China. - "IF-K"). For Kazakhstan's government China's participation has a certain priority", - Satpayev said. At the same time he has noted that it must be taken into account that "there was time when some Kazakhstan's financial-industrial groups, elite lobbyist groups had their eyes on PetroKazakhstan". "They are now trying to expand their participation in various oil and gas projects, including projects, where KazMunayGas make take no part. Thus, this factor should be taken into consideration", - Satpayev said. Expert of fuel-energy complex of one of Kazakhstan economic research institutes, who wished to stay unknown, said to "Interfax-Kazakhstan", that sale of PetroKazakhstan to CNPC International Ltd. Was logical in the point of view of the necessity to fill Kazakhstan-Chinese oil pipeline, which was being built. The pipeline is near the group of kumkol fields, which are now developed by PetroKazakhstan, and sale of the company to CNPC International will relieve the task of pipeline filling", - he said. The expert says CNPC in case of purchasing PetroKazakhstan will more effectively solve problems of accompanying gas utilization than present governing body of the Canadian company. He has noted that in Aktyubinsk oblast, where CNPC's subsidiary company - CNPC-Aktobemunaygas operates, questions on accompanying gas utilization are solved well. "The Chinese company has reconstructed one petroleum refinery, built the second one, and at present it plans to build the third one", - he said. CNPC on Monday agreed to buy all circulating common shares of PetroKazakhstan at $55 per unit, and total amount of the deal will be $4.18 bn. CNPC's offer is a generous premium at the rate of 21% to shares closing price on Friday. The agreement has already been approved by the Boards of directors of PetroKazakhstan and CNPC. Board of directors of PetroKazakhstan recommended shareholders to accept the offer. The Canadian company's financial consultant is Goldman Sachs International. For approval of the deal it's necessary to have 66.6% of votes of PetroKazakhstan's shareholders. According to terms of the agreement, PetroKazakhstan has no right to seek for new offer about purchase, however the board of directors has the right to accept and recommend shareholders the offer about purchase with a higher price for fulfillment of fiducial obligation after forfeit payment in the amount of $125 m. CNPC has the right to increase amount of offer. PetroKazakhstan Inc. is a vertically integrated, international energy company, celebrating its eighth year of operations in the Republic of Kazakhstan. It is engaged in the acquisition, exploration, development and production of oil and gas, refining of oil and the sale of oil and refined products. [2005-08-24]