Shareholders of the nation's largest oil and gas producer PetroChina have agreed to pay 20.7 billion yuan (US$2.5 billion) for half the overseas assets of its state-owned parent, the oil major told the Hong Kong Stock Exchange in a statement.

Shareholders representing 175 billion PetroChina H shares with voting rights, or 99.9 percent of the total number of issued H shares, attended a general meeting on Tuesday.

"As many as 99.728 percent of the PetroChina shareholders voted in favour of the overseas expansion plan (for getting a half stake of its parent China National Petroleum Corp's (CNPC) venture)," PetroChina said in the statement yesterday.

In June, the Beijing-based and Hong Kong-listed oil behemoth showed its keenness to buy 50 percent of CNPC's subsidiary Newco which sits on oil and gas assets in 10 countries: Kazakhstan, Venezuela, Algeria, Peru, Oman, Azerbaijan, Canada, Ecuador, Niger and Chad.

According to the acquisition agreement, the transaction will not involve CNPC's assets in Sudan, which make up more than half its overseas portfolio.

PetroChina will also inject its Indonesian oil and gas assets, worth 579.4 million yuan (US$71.4 million), into the venture.

The capital acquisition and the finalization of the deal is scheduled to be wrapped up by the end of the year and February of next year respectively, PetroChina earlier said in a statement.

Bi Jianguo, spokesman for PetroChina, yesterday refused to give more details, saying the oil company would release its interim report at the end of the month.

Industry analysts said the company's move reflects domestic oil majors' thrust for a strong footing in the world market by trying for new assets around the globe.

The overseas asset acquisition will enhance the company's international reserves by as much as 879 percent to reach 866 million barrels of oil equivalent, said PetroChina on its website.

It will also increase the company's total oil and gas reserves by 4.31 percent and lift output by 5.41 percent.

Soaring crude prices on the world market as well as the nation's rising demand for energy has raised PetroChina's crude output by 2 percent and gas turnover by a robust 23.4 percent in the first half of this year.

Crude oil production reached 396 million barrels from January to June, an increase of 8.1 million barrels from the same period last year.

On the gas front, the company said solid domestic demand as well as enhanced pipeline facilities have raised output by 96 billion cubic feet year-on-year, to top 506.3 billion cubic feet for the first six months.

During the six-month period, PetroChina's parent CNPC has seen its revenue soar 39.6 percent to hit 335 billion yuan (US$41.3 billion), as the group company's oil and gas output increased 3.9 percent and 20.1 percent respectively.

CNPC said its overseas projects have also made major progress, since 9.6 percent more crude was produced in its overseas fields in the first six months, and its gas turnover from these foreign assets rose 8.1 percent.

(China Daily August 18, 2005)