China, Kazakhstan May Sign $10 Billion Oil-for-Loan Agreement
DATE:2009-4-11  FROM:  AUTHOR:  DOWN:2553
April 11 (Bloomberg) -- China, the world’s second-biggest energy consumer, may agree next week on lending $10 billion to Kazakhstan in return for the right to take a stake in an oil producer in the Central Asian country.

China National Petroleum Corp. plans to buy a minority holding in AO Mangistaumunaigas from state-run KazMunaiGaz National Co., a China National official said yesterday. The two nations may sign an accord on April 15 when Kazakh President Nursultan Nazarbayev visits Beijing, the official said, declining to be identified because of internal rules.

China should tap its $1.95 trillion in currency reserves to help domestic companies buy overseas exploration rights, Zheng Xinli, a deputy director at the policy research office of the ruling Communist Party, said in March. Kazakhstan, an oil-rich nation, is spending 2.2 trillion tenge ($14.6 billion), or 14 percent of gross domestic product, to prevent the first economic contraction in a decade.

Kazakhstan is seeking $10 billion in Chinese investments, while talks are under way with China’s biggest oil company on the sale of a stake, Energy Minister Sauat Mynbayev said on April 6.

A KazMunaiGaz official, who asked not to be identified, declined to comment.

China is seeking to bolster oil supplies from Kazakhstan, the biggest energy producer in the former Soviet Union after Russia, the China National official said.

Russia, which agreed in February to supply China with oil for 20 years in return for $25 billion in credit, is in discussions with the country for additional loans for natural gas supplies, the official said, without giving details.

Nazarbayev will visit Beijing before attending the Boao Forum, a regional economic summit held on the southern Chinese island of Hainan.

China National is the parent of Hong Kong-listed PetroChina Co.

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