Kazakhstan has tripled oil output since 1995, after production dropped
following the collapse of the Soviet Union. Lukoil, Russia's largest oil
producer, paid $2bn in December for Kazakhstan producer Nelson Resources Ltd,
the Moscow-based company's biggest acquisition.
Lukoil has competed for assets with China National Petroleum Corp, which
bought PetroKazakhstan Inc for $4.2bn in October.
Energy-related takeovers announced by the two countries more than doubled
last year to $16.9bn, according to data compiled by Bloomberg.
China and India face stagnant domestic oil production as their biggest fields
age. India imports three-quarters of its crude oil, while China relies on
overseas supplies for about two- fifths of the fuel it uses.
Surging demand for oil in the two countries has helped drive a
more-than-threefold surge in the price of crude oil over the past 4 1/2 years.
Nations Energy put itself up for sale last year. The company produces more
than 50,000bpd, mostly from Kazakhstan's Karazhanbas field, its website shows.
Oil and Natural Gas spokesman D K Dash declined to comment. Huang Xiang, a
Beijing-based spokesman at Citic Group, couldn't be immediately reached for
comment in his office.
Philip Hirschler, a Geneva-based general counsel for Nations Energy, also
couldn't be immediately reached for comment.
China National, the parent of Hong Kong-listed PetroChina Co, and Cnooc Ltd,
the No 1 offshore oil company, were interested in bidding, people familiar with
their plans said earlier. Lukoil may also bid, they said.
The only Chinese bidder left is Citic, the people familiar said.
China and India have faced off over resources before, with China National
Petroleum last year outbidding Oil and Natural Gas for energy resources in
Kazakhstan and Ecuador. CNOOC agreed to buy a stake in a Nigerian oil field for
$2.27bn in January, a month after India's government blocked Oil and Natural
Gas's plan to buy the share.
The Indian oil company in April said it would pay $166mn for a 15% stake in a
Brazilian oil field owned by Royal Dutch Shell Plc, and spend a further $234mn
to help develop the asset.
Nations Energy had profit of $80.5mn on sales of $339.6mn in the first nine
months of 2004.
The Karazhanbas field was discovered in the 1970s and was in decline until
Nations Energy bought it in 1997 and increased investment, according to the
company's website.
Production grew to an average 35,154bpd in 2003 from less than 5,000 barrels
in 1999.
The nation's fields may hold as much as three times more oil, according to a
government report last year.
