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№ 7 (July 2007)

Lukoil and China National Petroleum strike a deal for oil and gas production

Lukoil, the largest oil producer in Russia, and China National Petroleum will cooperate on oil and natural gas production abroad and supplying hydrocarbons to China.

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The president of Lukoil, Vagit Alekperov, and the chairman of China National Petroleum, or CNPC, Jiang Jiemin, signed an agreement in Beijing "to expand cooperation in current projects and work on projects for production, exploration and refining of oil, gas and oil products" abroad, Lukoil said Saturday. CNPC is the biggest oil company in China.

The partners would also consider "opportunities to cooperate on supplying oil and gas to China and refining hydrocarbons" in the country, according to Lukoil, which is based in Moscow.

China, one of the world's largest energy users, 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 supplier in the former Soviet Union after Russia, last month agreed to finance and build a network of pipelines to supply China with oil and natural gas from the Caspian Sea region.

The joint projects of Lukoil and CNPC in Kazakhstan include the equally co-owned Kumkol oil field and the Northern Buzachi field, in which CNPC holds a 50 percent stake and Lukoil has a 25 percent holding, the Russian company said in a statement.

The two companies also each hold a 20 percent stake in an offshore international venture to explore for oil and natural gas on Uzbekistan's side of the Aral Sea.

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 last year.

Indonesia exploration deal
PT Pertamina, Indonesia's state oil company, and Lukoil have agreed to jointly bid for exploration rights in the Southeast Asian country.

Source: International Herald Tribune

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