PetroKazakhstan shareholders OK CNPC bid
(Reuters)
Updated: 2005-10-19 08:43

In recent weeks, the deal was thrown into doubt by Kazakh lawmakers, who sought greater control over their country's oil resources, and the stock skidded to well below the bid price.

The government of President Nursultan Nazarbayev passed a law last week that gives the state the right to intervene in the sale of foreign-held oil stakes.

PetroKazakhstan chief executive Bernard Isautier smiles while being interviewed after shareholders' approval to sell the company to China State Oil at a meeting in Calgary October 18, 2005.[Reuters]

Kazakh Oil Minister Vladimir Shkolnik said he was angered by PetroKazakhstan and its adviser, Goldman Sachs, for not keeping him well informed.

CNPC said on Monday it had managed to smooth over the rifts by agreeing to transfer a stake in PetroKazakhstan to state-controlled KazMunaiGaz in some 11th-hour diplomacy. The Kazakh government's Paris-based public relations firm said CNPC agreed to hand over 33 percent.

One analyst said the government's moves did not bode well for interest in Kazakhstan among foreign investors. Sky-high oil prices have fueled increased energy nationalism in other countries as well, Peters & Co. Ltd. analyst Wilf Gobert said.

"Going back to the developments in Russia and the intervention of the state in private companies, we've seen a mounting wall of ... obstruction by bureaucrats and politicians who are destabilizing confidence in investing," Gobert said.

Russian oil major Lukoil, a partner in a joint venture with PetroKazakhstan, has said it plans to ask the Alberta court to halt the deal because it believes it has rights to the venture stake that will be transferred to CNPC.