CITIC acquires oil assets in Kazakhstan

China, aggressively seeking overseas energy assets to fuel its booming economy, said Sunday that one of its biggest conglomerates had bought the Kazakhstan oil assets of a Canadian company for $1.91 billion.

China’s CITIC Group bought the oil assets of Canada’s Nations Energy Co. and granted KazMunaiGas, Kazakhstan’s state-owned oil company, an option to a 50% interest in Nations Energy, the official New China News Agency said.

CITIC’s bid for Nations Energy’s Karazhanbas oil field had been opposed by some in the former Soviet Central Asian republic, and the option for KazMunaiGas may have been one way to win approval from Kazakhstan regulators.

China’s economy has experienced double-digit growth in recent years, accompanied by increased demand for oil and natural gas assets to improve its energy security. Kazakhstan possesses the largest oil deposits in the Caspian Sea region and produces about 1.3 million barrels a day.

In November, Kazakhstan’s oil minister said he was against the CITIC Group deal.

“We must take extreme measures to stop the agreement on the Karazhanbas,” Baktykozha Izmukhambetov said, referring to an oil field that is Nations Energy’s biggest asset in the Central Asian nation.

CITIC Group is one of China’s biggest conglomerates. It was set up in Hong Kong in 1979 by former Vice President Rong Yiren as the government’s main overseas investment arm.

The Karazhanbas field in western Kazakhstan has proved reserves of more than 340 million barrels of oil. Current production exceeds 50,000 barrels a day.

CITIC, which has significant infrastructure investments in Central Asia, is planning to build a refinery at Karazhanbas, Zhang Jijing, one of its directors, said in October.