Lukoil, CNPC to Collaborate

According to Bloomberg, OAO Lukoil, Russia's largest oil producer, and China National Petroleum Corp. will cooperate on oil and gas production abroad and supplying hydrocarbons to China. The partners will also consider ``opportunities to cooperate on supplying oil and gas to China and refining hydrocarbons'' in the country, according to Lukoil. China, the world's second-largest energy user, is seeking energy supplies as its economy expands at an annual rate of 11.9 percent, the fastest pace in more than a dozen years. The leaders of China and Kazakhstan, the second-biggest energy suppliers in the former Soviet Union after Russia, last month agreed to finance and build a network of pipelines to supply China with oil and gas from the Caspian Sea region.

The joint projects of Lukoil and CNPC in Kazakhstan include an equally co-owned Kumkol oil field and a Northern Buzachi field, in which CNPC holds a 50 percent stake and Lukoil has a 25 percent holding, the Russian company said in the statement. The two companies also each hold a 20 percent stake in an offshore international venture to explore for oil and natural gas in Uzbekistan's side of the Aral Sea.

ZAO Turgai Petroleum, a Kazakh producer co-owned by Lukoil and CNPC, plans to start supplying crude oil to China next year, Boris Zilbermints, a Lukoil director for Kazakh operations, said in June. Lukoil plans to buy out CNPC's 50 percent of Turgai after winning the right to buy the holding through arbitration in Stockholm last year. (Source: Bloomberg)