State-owned Chinese oil company CNPC has agreed to buy PetroKazakhstan Inc for $4.18 billion (Dh15.34 billion) in China's largest foreign takeover, beating rival bidders including top Indian oil firm ONGC.
The parent of PetroChina, the world's fifth-largest listed oil company, will pay $55 a share in cash, a 21.1 per cent premium to Friday's closing price, said PetroKazakhstan, a Canadian-listed oil company operating in central Asia.
The deal, if it goes through, would be China's first successful takeover of a foreign listed energy firm and highlights Beijing's scramble to secure supply security for the world's second-largest oil consuming nation and the world's fastest-growing major economy.
"It's a very high price but this is a strategic investment. Finally, it's reserves that you can bring to China," said Stephen O'Sullivan, oil analyst at United Financial Group in Moscow.
Chinese oil companies have been scouting the world for buys since the country became a net oil importer in 1993.
A recently established joint venture set up by CNPC and PetroChina is looking at 10 overseas deals, a PetroChina executive said earlier this year.
Industry sources familiar with the strategy of Chinese state oil companies said the companies may have put more overseas listed energy companies on their radar screen, such as Britain's BG, some Canadian oil sand producers, and possibly exploration and production companies listed in Australia or London.
But Chinese oil firms have suffered a string of setbacks in their foreign forays due to political opposition and sky-high valuations of oil assets inflated by near record high oil prices.
CNOOC, China's third largest oil producer, lost out last month in an $18.5 billion bid battle for US energy producer Unocal Corp.
Rival Chevron Corp eventually won control of Unocal with a lower bid price than CNOOC's, which pulled out of the fight after US politicians opposed its bid.
Analysts said the price paid by CNPC for Petro-Kazakhstan appeared high, but it would strengthen China's already substantial operations there, which include a giant pipeline pumping crude to China from the oil and gas-rich former Soviet state.