RusEnergy

Dec. 7, 2006 - Upstream onLine - Kazakhstan looks set to take a controlling stake in assets belonging to Nations Energy before China International Trust & Investment Corporation (Citic) ties up its takeover of the Canadian player, an industry official said today. The government is awaiting a report by a panel of experts on what size holding it should take in the company, Ulan Baizhanov, head of the President's Administration at state-run KazMunaiGaz, told Reuters. "The expert group will give us the answer - to buy all the company, or part of it," he said through an interpreter. Asked how large a stake he thought authorities aimed to take, he said they were interested in controlling assets and management. "I can't answer for the government, but it looks like it could be more than 50%," he added. A government takeover would be a massive disappointment toCitic, a diversified investment vehicle with few oil interests. It announced the $1.9 billion deal in October and said it expected to close it in December, pending shareholder approval. But last month Kazakhstan's energy minister called for urgent steps to block the deal, Interfax agency reported, and some members of parliament have expressed concern over it. The former Soviet state has introduced legislation that aims to give it the right to buy foreign-held stakes in oil companies that are put up for sale and to limit property rights over "strategic resources", such as oil and gas. Some officials fear that neighbouring China may be gaining too much influence over the country's energy resources. Last year China National Petroleum Corporation bought another Canadian player, Petrokazakhstan, for $4.2 billion, but that deal only went through after the government threatened to use Kazakh law to block it.