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China's Zhongxin to close deal for Kazakh oil field

BEIJING. July 9. KAZINFORM. China-based Zhongxin Resources Ltd., is close to finalizing a deal for the rights to an oilfield in Kazakhstan, according to sources. The company is a joint venture between China's Citic Guo'an Group and Suntime International Economic Trading Group<600084>. They are projected to pay US$250 million for the Mortuk oil field in the northwestern region of Aktobe in Kazakhstan, said the source. The Mortuk oil field is owned by KKM Operating Co., a private Kazakh company. The purchase is expected to be completed this month. Official figures say that there are about 500 million barrels of proven reserves and 85 million barrels of probable reserves in place at Mortuk, Kazinform cites China Knowledge. Zhongxin Resources, established in Mar. 2006 in Urumqi, the capital of Xinjiang region in northwestern China, the company has a registered capital of US$105 million, sources say. The company's core function is to develop energy and mineral resources in Central Asia. This acquisition comes in the tracks of the intensifying push for Chinese companies to tap into the recoverable oil reserves in the Central Asian region, which is estimated to hold a total of 4.8 billion metric tons, or 35.2 billion barrels. Local concern has been mounting over the increasing presence of Chinese companies in the development of Kazakhstan's natural resource industry. Kazakh Energy and Mineral Resources Minister, Baktykozha Izmukhambetov, told local press in May that Chinese oil and gas companies in Kazahstan produced 20 million metric tons of oil a year, or 400,000 barrels a day, while the Chinese share of daily output was 13 million tons, about 260,000 barrels, or 20% of overall Kazak oil output. There is good cause for local concern, which was sparked off by China National Petroleum Corp's acquisition of PetroKazakhstan Inc. for $4.18 billion in 2005. Wary of the increasing dominance of Chinese companies of local resources, the Kazakh government has started to tighten regulations covering the sale of oil and natural gas assets. Copyright © 2007


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