CIC Buys Stake in Kazakh Gas Company for $939 Million
01.10.2009
China’s sovereign wealth fund has bought a stake in the London-traded unit of Kazakhstan’s state-run energy company, taking its spending on resources to at least $3.69 billion this month.
China Investment Corp, which holds almost $300 billion, bought an 11 percent stake in Astana, Kazakhstan-based JSC KazMunaiGas Exploration Production for about $939 million by purchasing global depositary receipts, according to a statement dated today on the Beijing-based fund’s Web site.
China is hunting for resources fr om Canada to Nigeria to support expansion in the world’s fastest-growing major economy. Today’s deal follows a combined $2.75 billion spent by the fund on Indonesia’s PT Bumi Resources and Noble Group last week.
“The reason why China is investing in assets like this is simple: it needs more oil and gas,” said Shi Yan, an analyst at UOB-Kay Hian in Shanghai. “China also has huge financial reserves and with commodity prices still down from highs last year, it’s still a good time to buy.”
KazMunaiGas Exploration’s GDRs rose as much as 4.5 percent to $21 as of 8:47 am in London.
CIC bought $1.9 billion of debt from Jakarta-based Bumi Resources, Indonesia’s biggest coal producer, last week, and paid $850 million for a 15 percent stake in Noble, a Hong Kong-based commodity supplier, on Sept. 22. Vancouver-based Teck Resources, Canada’s largest diversified mining company, sold a 17 percent stake to CIC in July.
China, the world’s biggest buyer of commodities including soybeans, cotton and iron ore, will expand 8.2 percent this year, compared with a March forecast of 7 percent, the Asian Development Bank said this month.
China has turned to countries including Canada, Singapore, Iraq and Kazakhstan this year in its hunt for resources. China Petrochemical Corp’s purchase of Swiss-based Addax Petroleum for $7.2 billion in June added oil reserves in the Kurdish area of Iraq, Gabon and Nigeria.
PetroChina, the country’s biggest listed oil company, agreed in April to pay up to $1.4 billion for half of a gas joint venture in Kazakhstan. PetroChina is buying 50 percent of the venture and state-owned KazMunayGaz National Co. will own the remainder.
“China is targeting particular areas of the world like Central Asia and Africa to secure energy resources,” said Michael Yu, an energy analyst at China Merchants Securities in Hong Kong. “China has good relations with developing countries like Nigeria and Angola and this helps secure deals. It’s far more difficult for China to secure resources in developed countries like the US wh ere there may be more political opposition.”
PetroChina’s refinery in Dalian started processing high-sulphur Sudan crude oil for the first time in April. China National Offshore Oil Corp is among companies in talks to acquire 16 production licenses in Nigeria, the west African country’s president’s office said yesterday, according to Bloomberg.