Russia Sells China its Stake in Kazakh Oil

Russia Sells China its Stake in Kazakh Oil
FILE – This April 2012 file photo provided by North Caspian Operating Company NCOC shows Kashagan offshore oilfield is in western Kazakhstan. The supergiant field, which is believed around 13 billion tons of recoverable oil, is expected to begin producing its first crude in 2013 after many years of delays. (AP Photo/North Caspian Operating Company, File)

Lukoil—the second largest oil producer in Russia—sold its stake in Kazakh oil company Caspian Investments Resources to China Petroleum & Chemical Corporation, reported UPI.

The deal was closed amid worsening conditions in both Kazakhstan and China, as both countries have recently seen the value of their currencies plummet.

The agreement is for a 50% stake in Caspian and is reported to have cost China Petroleum & Chemical (also known as Sinopec), just over $1b.

“That’s a great piece of luck for Lukoil that Sinopec had closed the deal after all, given worsened expectations over the Chinese economy,” said Maxim Moshkov, an energy analyst at UBS Group AG in Moscow.

The new deal seals Chinese dominance over Caspian Investments Resources, as Sinopec and affiliated companies already own the other half of the group, noted Bloomberg

Lukoil has reported that cumulative production since 2006 has resulted in 95m barrels of crude oil and about 1bcf of natural gas.

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