China outbid India to acquire PetroKazakhstan Inc, Kazakhstan's third largest oil producer, after its flagship company CNCP raised its offer higher than the Indian price.
China National Petroleum Corp, which trailed Oil and Natural Gas-Mittal Group combine when price bids were made on August 15, raised its bid to $4.18-billion to acquire PetroKazakhstan, a Canadian oil firm operating in Central Asia.
ONGC-Mittal combine was not given a chance to match or rebid, ONGC sources said.
In an early morning press statement, PetroKazakhstan said CNPC would pay $55 a share in cash.
"The Indians were clearly ahead of Chinese in the first round. The merchant bankers acting on behalf of the seller (PetroKazakhstan) had even sought certain clarification on their bid on Friday. The Indians were to submit the clarifications today but the sale announcement came before that," a Kazakh source said.
PetroKazakhstan made the sale announcement at 0730 hrs London time, at least a couple of hours ahead of the scheduled filing by ONGC-Mittal combine at the London office of the merchant banker.
The Kazakh official said the Indian consortium had told the merchant bankers on Friday (August 19) that they were willing to better their bid of close to $4 billion if certain information on PetroKazakhstan's operation was provided.
"That never happened," the official said but was unable to explain why the Indians were not given a chance to rebid.
PetroKazakhstan accounts for about 12 per cent of oil production in Kazakhstan and is the third largest oil producer in that country. It owns 500 million barrels of reserves, 150,000 barrels a day of crude output and a refinery in Kazakhstan.
State-owned KzaMunaiGas is the largest oil producer in Kazakhstan, followed by Chevron.
Calgary-based PetroKazakhstan's board recommended that its shareholders accept the Chinese oil company's offer. The transaction is expected to close in October, the company statement said.
PetroKazakhstan was the first company India's flagship ONGC had bid for jointly with the world's largest steel producer Mittal Group.
ONGC had teamed up with Mittals to leverage the steel maker's dominant position in former Soviet republics. Out of the 14 countries Mittal Group had business interest in, 6-7 had oil and gas opportunities.
In Kazakhstan, where Mittal Group has huge business interest and considerable influence on the government, OVL has been eyeing a stake in Kurmangazy oilfield besides interest in Makhambet and Satpayev exploration blocks.
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