CNPC Hong Kong said it will buy the stake in Commonwealth Gobustan Ltd from Switzerland-based Rosco S.A. under an agreement signed earlier this month.

The deal came after the company paid US$$14.53 million last November for an additional 10 per cent of Salyan Oil Ltd, which owns fields in Azerbaijan.

With output in the domestic senioring oilfields declining, China National Petroleum Corp has moved fast to acquire overseas oil reserves for growth.

Oil-rich Central Asia, along with Russia, the Middle East, North Africa, and South America, are among the hot spots that Chinese oil companies have been pursuing for overseas expansion.

Via a wholly owned unit Smart Achieve Developments Ltd, CNPC Hong Kong said yesterday that it has also agreed to acquire 30 per cent of a US$20 million unsecured loan extended by the vendor, which now has a 62.82 per cent stake in Gobustan.

Gobustan has an 80 per cent participating interest in several blocks in Azerbaijan to carry out oil exploration, development and production, it said in a statement. Gobustan had a net asset value of US$3.58 million at the end of last September, it said.

The statement said that another overseas unit of China National Petroleum, CNPC International Ltd, has also entered into an agreement to buy a 31.41 per cent stake in Gobustan from Rosco.

The remaining 37.18 per cent stake in Gobustan is held by Commonwealth Oil & Gas Co Ltd, which is independent of CNPC Hong Kong and its directors, the statement said.

(China Daily January 28, 2003)