Will OVL get Petrokazakh stake?

The Kazakhstan government has assured India that it will consider allowing ONGC Videsh Ltd to acquire a share in the assets of Canadian oil company Petrokazakhstan, a top government official said.

"The Kazakhstan government has said that the details of the financial transactions are still being worked out and the possibility of Indian companies getting a share will be looked into," Talmiz Ahmad, additional secretary in the petroleum ministry said after Petroleum Minister Mani Shankar Aiyar met a high-level Kazakh delegation.

Ahmad said the Kazakh government has promulgated a new law by which they would have pre-emptive rights over the sale of Petrokazakh's assets to foreign companies.

The new law gives Kazakhstan national oil company the right to acquire 51 per cent stake in PetroKazhakstan. "The issue is likely to be finalised before the India-Kazakhstan joint commission meet in February 2006," he said.

Earlier this year, China's CNPC had outbid OVL for acquiring Petrokazakh with a $4.18 billion offer. Kazakhstan government had said it opposed the CNPC takeover because PetroKazakhstan did not inform it about the deal.

Also, the government wanted control over some of PetroKazakhstan's assets, including the Shymkent oil refinery - one of only three in Kazakhstan. 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.