China and Russia in court over Kasakhstan oil


Russian, Chinese firms battle for oil in Kazakhstan

Lucie Godeau, Daily Times (Pakistan)

A battle between Russian oil giant Lukoil and China’s CNPC for control
of key energy assets in Kazakhstan intensified last week with both
sides deploying lawyers to fight for holdings in the energy-rich
central Asian country.

Positioned midway between Russia and China, Kazakhstan has the highest
proven oil reserves anywhere in the Caspian Sea region and is regarded
as one of the most important potential sources of new crude oil
supplies to world markets.

The state-run CNPC, spurred by soaring Chinese demand for petroleum,
won a key victory when a court in Canada gave approval on Wednesday to
CNPC’s purchase of the Canada-registered firm PetroKazakhstan for a
price of 4.18 billion dollars. …

He [Valery Nesterov, energy analyst with the Troika Dialogue investment
firm in Moscow] noted however that while the government of Kazakhstan
is “politically and historically closer to Russia, and is wary of
China,” it nonetheless believes that “its interest lies in a
diversification of investments and export routes.”

At present, the only pipeline that carries Kazakh crude to the world
market is that of the Caspian Pipeline Consortium (CPC), which transits
through Russia.

But the launch next year of the Atassu-Alashanku pipeline will reduce
this dependence by providing a route for export of Kazakh oil directly
to China. Kazakhstan currently produces around 1.3 million barrels per
day of crude and the government plans to raise that to 3.5 million
barrels per day by 2015. afp

(31 October 2005)

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