China moved to tighten its grip on Central Asia’s vast oil and gas resources yesterday by acquiring close to a $1 billion (£600 million) stake in one of Kazakhstan’s biggest oil producers.

China Investment Corporation (CIC), Beijing’s sovereign wealth fund, which holds assets worth about $200 billion, bought the 11 per cent stake in KazMunaiGas Exploration and Production, a subsidiary of Kazakhstan’s national oil company.

The transaction, worth $939 million, gives China a key stake in Kazakhstan’s second-biggest oil producer, which is developing 41 oil and gasfields in the country and has 1.8 billion barrels of reserves.

Carried out via a CIC subsidiary called Fullbloom Investment, which bought the stake via the London-listed global depositary receipts of KazMunaiGas EP, the deal adds to a growing list of Chinese investments in foreign companies in recent weeks, as Beijing seeks to bolster energy supplies for its booming economy.

Last month CIC bought a 14.5 per cent stake in Noble Group, the commodities trading firm.

In April, China’s main state oil company, China National Petroleum Corporation, purchased half of MangistauMunaiGaz, another Kazakh oil company, for $3.3 billion.

Chinese companies are also in talks about securing a big stake in Nigeria’s oil industry, with some reports saying that up to 6 billion barrels of crude could be at stake in the negotiations.

Kazakhstan currently exports oil to China via a pipeline with a capacity of 73 million barrels per year, but there are plans to double this.

Chinese businesses are also active in neighbouring Turkmenistan and a gas pipeline to China is due to enter service later this year with a capacity of 40 billion cubic metres a year.

China is also helping Kazakhstan to boost output from its uranium mines, much of which will be used to fuel a new generation of Chinese nuclear power plants. At the end of 2007, CNPC, China’s top oil and gas company, had 16 projects in Central Asia and Russia. In 2005, CNPC bought PetroKazakhstan, the Canadian oil producer, for $4.2 billion.

According to BP, the British oil group, Kazakhstan has 39.8 billion barrels of proven oil reserves, the ninth largest in the world.

• International Power, the generation company, has agreed to acquire AIM PowerGen Corporation, the Canadian unit of Renewable Energy Generation, the British wind-farm operator, for $119 million in cash.

Renewable Energy said it would use the proceeds from the sale of the unit to fund activities in the UK, including generating power from used vegetable cooking oil.

http://business.timesonline.co.uk/