China, Kazakhstan ink $10 Billion Loan for Oil
China, the world’s second-biggest energy consumer, will lend $10 billion to Kazakhstan in return for a stake in an oil producer in the Central Asian country.
China National Petroleum Corp. and KazMunaiGas National Co. will buy AO Mangistaumunaigas, according to one of 11 agreements that were signed in the presence of President Hu Jintao and his Kazakhstan counterpart Nursultan Nazarbayev in Beijing today.
The $10 billion aid comprises a $5 billion loan from the Export- Import Bank of China to the Development Bank of Kazakhstan and another $5 billion from China National to KazMunaiGas.
China has signed three other loan-for-oil agreements with Russia, Brazil and Venezuela this year, taping its $1.95 trillion foreign-exchange reserves to buy energy assets after oil’s 66 percent decline from July’s record. China’s oil imports climbed to a one-year high in March, according to customs data.
State-run China National and KazMunaiGas plan to expand partnership in the oil and gas industry, according to the agreements. The nations also signed an initial accord to build a “road transport channel” linking western China and Europe. No details were provided. Other agreements include accords to cooperate in agriculture, education, finance and telecommunications.
Kazakhstan, the biggest energy producer in the former Soviet Union after Russia, 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 received an estimated $21.1 billion in exploration and production investment last year, a 19 percent increase on 2007, Sauat Mynbayev, the nation’s energy minister, said in January. It holds 3.2 percent of the world’s proven oil reserves, according to BP Plc. Chevron Corp., BG Group Plc, Eni SpA and OAO Lukoil are among other foreign investors in the country’s oil and gas industry.
Nazarbayev is visiting Beijing before attending the Boao Forum, a regional economic summit held on the southern Chinese island of Hainan.
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, agreed to take a $10 billion loan from state-run China Development Bank Corp. and supply as much as 100,000 barrels of oil a day to China Petroleum & Chemical Corp., Chief Executive Officer Jose Sergio Gabrielli said in Brasilia Feb. 19.
China agreed on Feb. 17 to provide Russia with $25 billion of loans in return for 300,000 barrels a day of oil for 20 years. Venezuela’s Petroleos de Venezuela, known as PDVSA, will provide 200,000 barrels a day to the Asian country to pay down a $4 billion loan from China Development Bank.
China National is the parent of Hong Kong-listed PetroChina Co., according to Bloomberg