CNPC (Hong Kong), a Hong Kong-listed unit of China's largest oil producer China National Petroleum Corp (CNPC) will pay US$140 million to increase its stake in a venture with interests in three oil fields in Kazakhstan.

The Hong Kong-listed subsidiary said it is buying an additional 20 percent of CNPC International (Caspian) Ltd from Darley Investment Services Inc, increasing its share to 60 percent. The remaining stakes will be directly owned by Beijing-based CNPC, said a CNPC (Hong Kong) Ltd statement, which is 52.9 percent controlled by its parent company CNPC. Darley thus, will hold no interest in CNPC International (Caspian) Ltd.

The deal, scheduled to be complete by today, will boost CNPC's oil reserves abroad. The move aims to meet the soaring energy demand from China and is in line with the objective of becoming "an international petroleum company that offers a diversified range of petroleum operations in various countries," the company statement said.

The Kazakhstan venture that CNPC is buying owns 25.12 percent shares of three oilfields in Aktobe, which has a production capacity of 17,500 tons of crude oil per day.

The acquisition will be funded by a six-month bank loan of US$120 million secured on Monday, with the remainder coming from internal resources, CNPC (Hong Kong) said.

CNPC (Hong Kong), which holds assets in Southeast China and South America, bought its initial 40 percent stake in the Kazak oil venture in December 2003 from CNPC International for US$11 million.

It had a net income of HK$611 million (US$79 million) in the first half of this year, an increase of 44 percent from last year.

China's oil big players, in order to secure reserves for growing oil demand from the domestic market, are acting vigorously to tap overseas assets.

The Beijing-based oil conglomerate in August reached an agreement with PetroKazakhstan Inc to buy the Canadian-registered company for US$4.18 billion, a move that would now be opposed by political quarters in Kazakhstan, whose parliament has passed a bill allowing the state to intervene in the sale of foreign-held stakes in oil companies.

Kazakhstan boasted 3.3 percent of the world's oil reserves at the end of 2004, as stated in the BP Statistical Review of World Energy 2005. The central Asian country produced 1.3 million barrels of oil daily last year, and plans to triple oil output by 2015.

CNPC (Hong Kong) shares yesterday fell 0.617 percent to HK$1.61 (19.9 US cents).

(China Daily October 14, 2005)