LUKOIL hopes to settle PetroKaz row with buyer CNPC

28.10.05 12:53
/REUTERS, Moscow, October 28, 05/ - Russia's top oil company LUKOIL is still determined to buy out Turgai Petroleum, its Kazakh joint venture with PetroKazakhstan, despite the latter's acquisition by China's CNPC, a LUKOIL official said on Thursday. LUKOIL says it has pre-emption rights over Turgai, which produces around a third of PetroKazakhstan's total output of 150,000 barrels of crude oil per day, and filed a suit at the International Arbitration Court in Stockholm earlier this month. "We are going to continue litigation in Stockholm, but we also count on the understanding of PetroKazakhstan's new owner," LUKOIL's vice-president Leonid Fedun told Reuters. He declined to say how much LUKOIL was prepared to pay for the remaining 50 percent of Turgai, but added that analysts' estimates of around $700 million were close to reality. LUKOIL had also asked a court in Canada to block PetroKazakhstan's $4.2 billion takeover by CNPC, but earlier this week the judge ruled that its pre- emption claim was not grounds to block the deal and cleared it to go ahead. LUKOIL amazed investors on the eve of the ruling with an announcement that revealed the strength and urgency of its Kazakh ambitions. It said it was ready to match CNPC's bid for the whole company if the ruling went its way. The judge's ruling snuffed out its short-lived counterbid. Analysts said that was good news for LUKOIL, since CNPC -- keen to secure Kazakh oil for China's booming industry -- was already paying more than the firm was worth. LUKOIL, which is 15 percent owned by U.S. oil firm ConocoPhillips, has already agreed the $2 billion acquisition of Nelson Resources, another Toronto-listed Kazakh oil producer. It also said on Thursday it was considering a joint project with the Kazakh government to build a gas-chemicals complex in the Central Asian state costing $3.6-$3.8 billion. [2005-10-28]