China outbids India to buy Petrokazakh

In a blow to the Oil and Natural Gas Corporation-LN Mittal consortium's hunt for oil and gas abroad, Calgary-based PetroKazakhstan on Monday announced that a wholly owned subsidiary of China National Petroleum Corporation (CNPC) would take over the Kazakh company with an offer price of $55 per share, aggregating $4.18 billion.

ONGC executives said CNPC's bid was lower than ONGC-Mittal's, but the Chinese company was asked to rebid. They said the consortium, too, would rebid, if given a chance.

Meanwhile, PetroKazakhstan has said it is not aware of any bids in the works. Provisions of the deal prohibit the company from soliciting new offers, but it would have to consider any competing bid if it surfaced and recommend it to shareholders, CEO Bernard Isautier said.

PetroKazakh had offered 51 per cent stake but ONGC lost out after it said it made a "fairly attractive" bid. "We lost out by a narrow margin," ONGC Chairman Subir Raha told a private television channel.

"Our bid was fairly attractive and it was for more than $3.6 billion," a senior ONGC executive said. LN Mittal is a big investor in Kazakhstan executive said. LN Mittal is a big investor in Kazakhstan. He acquired one of its largest steel plants in Temirtau in 1996.

Indian oil companies like ONGC Videsh Ltd had earlier lost out to the Chinese companies in the race for oil and gas assets in Angola and for a Yukos asset in Russia.

The takeover agreement had been reviewed by a special committee of the board of directors of PetroKazakhstan and had been approved by the boards of directors of both

ONGC-Mittal lose PetroKazhak bid to Chinese company PetroKazakhstan and CNPC International, the Calgary-based company said in a release.

CNPCI's offer is subject to approval by two-thirds of votes to be cast by PetroKazakhstan shareholders at an extra-ordinary general meeting in October.

PetroKazakh accounts for about 12 per cent of oil production in Kazakhstan "� which has 3.3 per cent of the world's reserves. It is a vertically integrated, international energy company.

The company is engaged in acquisition, exploration, development and production of oil and gas, refining of crude oil and sale of oil and refined products.

It has proven and probable crude oil reserves of 550 million barrels in the South Turgai Basin in the south central part of Kazakhstan and its production averaged 151,102 barrels of oil a day in 2004.