Court delays CNPC bid for PetroKazakhstan
(AFP)
Updated: 2005-10-20 13:40

This deal may also suggest the beginnings of a race for scarce energy resources between Asia's two largest emerging economies, China and India, according to analysts.

"India's needs for energy or oil imports are much smaller than China's, but India's economy is growing and they need, too, to buy resources," said David Zweig, a China expert at the Hong Kong University of Science and Technology.

"To continue to grow, both of these countries need to gain access to resources," he said.

Analysts said CNPC had a much stronger case than its Indian rival, state-controlled Oil and Natural Gas Corp and its partner, LN Mittal, because of its higher bid and China's proximity to Kazakhstan that makes it cheaper and easier to transport oil.

Monday, India's petroleum minister Mani Shankar Aiyar accused US investment bank Goldman Sachs of rigging the bidding for PetroKazakhstan to favour CNPC.

Aiyar said in a report the auction was marred by a "lack of propriety and transparency" and accused Goldman Sachs of changing the rules mid-way through the bidding for the company and its 550 million barrels of proved and probable oil equivalent reserves which helped CNPC.

Bankers agreed ONGC's initial bid of US$51 a share was higher than CNPC's US$50 but say CNPC was then granted a period of exclusivity because its deal was "deliverable."

CNPC subsequently raised its offer to US$55.

CNPC signed a letter of intent over the weekend to sell a 33 percent stake in PetroKazakhstan to Kazakhstan's state-owned oil company after Kazakh officials threatened to block the deal and the country's parliament rushed through a law last week that would allow the state to intervene in a sale of strategic natural resources.