China's bid to purchase the US oil major Unocal foiled by Chevron, which beat the Chinese firm CNOOC to the punch, it is now seeking a stake in the Caspian Basin oilfields of Kazakhstan--where Chevron is a major investor.
The state-owned China National Petroleum Corp. (CNPC) has launched a $4.18 billion bid for PetroKazakhstan, and India' state-run company Oil and Natural Gas Corporation (ONGC) immediately said it was preparing a counter-bid. The deal would give CNPC access to PetroKazakhstan's 150,000 barrels per day of production - a small fraction of China's 6 million barrels per day of consumption but a step nonetheless for the world's second-largest oil-consuming nation. It would also be China's first successful takeover of a foreign-listed energy company. "There is a clear logic for the Chinese in this acquisition as they further strengthen their position in Kazakhstan, whose output is growing fast and which controls 3.3 percent of global oil reserves," said Steven Dashevsky, chief analyst at Aton Brokerage in Moscow.
CNPC, the parent of PetroChina, is the world's fifth-largest listed oil company. China already has substantial operations in Kazakhstan, including a pipeline pumping crude to the People's Republic. (Reuters, Aug. 22, via TruthOut [2])
India's ONGC quickly lost out to China's CNPC in the race for PetroKazakhstan , which announced the next day it had agreed to a $4.18 billion takeover offer from CNPC. (Reuters [3], Aug. 23)
China and India are traditional rivals, but both have a stake in getting a piece of the Caspian Basin action before the US establishes complete hegemony over it. And the fact that the US military is now straddling the Persian Gulf from Iraq makes this imperative all the more urgent.
See our last post on the struggle for Unocal [4] and the Great Game [5]for Central Asia.
