Posted on 08/22/2005 5:28:04 AM PDT by Brilliant
State-owend China National Petroleum Corp. struck a deal with PetroKazakhstan Inc. to offer $55 a share to acquire the Canadian company as China seeks to secure new oil reserves abroad.
PetroKazakhstan said Monday that the offer by CNPC values PetroKazakhstan at $4.18 billion. It comes just weeks after another Chinese company, Cnooc Ltd., abandoned its effort to acquire U.S. oil producer Unocal Corp. amid political pressure from Washington...
The Chinese company beat out competition from a joint venture made up of India's ONGC Videsh...
The deal brings state-owned CNPC access to PetroKazakhstan's proved and probable reserves of roughly 550 million barrels of oil equivalent and production of 149,732 barrels a day of light crude, according to PetroKazakhstan's Web site. PetroKazakhstan is based in Calgary, in the Canadian province of Alberta, but operates solely in Kazakhstan...
CNPC's bid for PetroKazakhstan is a natural fit to its other investments in Kazakhstan. Together with KazMunaiGaz, CNPC is building a 1,000-kilometer pipeline linking Atasu in Kazakhstan and Alataw Pass in the autonomous region of Xinjiang in China that is expected to carry 200,000 barrels a day of oil from late 2005.
The CNPC offer for PetroKazakhstan represents a premium of 24.4% based on the weighted average closing price of PetroKazakhstan common shares on the New York Stock Exchange for the 20 previous trading days ended Aug. 19, PetroKazakhstan said. It also represents a 21.1% premium to the closing price on Aug. 19, the most recent date on which the shares traded, it said.
The CNPC offering price is reasonable, said Gideon Lo, an analyst with DBS Vickers. The winning bid of $4.18 billion prices PetroKazakhstan's reserves at roughly $7.60 a barrel, in line with the end-2004 valuation of PetroChina's 18.4 billion barrels...
(Excerpt) Read more at online.wsj.com ...
For china it represents approximately a 40% discount considering the true value of their worthless currency.
The global war for oil continues.....
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