CNPC bids on PetroKazakhstan

State-owned Chinese oil company CNPC launched on Monday a bid of $4.18 billion for PetroKazakhstan. Acquisition of the company would give China access to PetroKazakhstan’s 150,000 barrels per day of oil production, only a small fraction of China’s daily consumption. Still, it is considered a strategic investment for China, which is the second-largest consumer of oil in the world. If CNPC’s bid is successful, it would mark the first acquisition for China of a
foreign-listed oil company.

CNPC might have competition for PetroKazakhstan, however, as Indian oil company, Oil and National Gas Corporation Ltd. (ONGC), has said that it is preparing a counter-bid. Analysts said that the CNPC bid was high for an asset that is already considered to be past its prime, but it is
considered likely that if ONGC makes a bid, it will be larger than that CNPC has made.

News of the Chinese bid sent shares of PetroKazakhstan up by 19 percent to $54.06 on the New York Stock Exchange in morning trade while shares in PetroChina, a unit of CNPC, gained less than 1 percent, to $82.38 on the NYSE.