BEIJING (AP) _ China's biggest state-owned oil company announced Monday that a major oil producer in neighboring Kazakhstan has accepted a US$4.2 billion (euro3.4 billion) takeover offer, a step forward in Beijing's campaign to secure foreign energy supplies for its booming economy.
China National Petroleum Corp.'s purchase of Canadian-based PetroKazakhstan Inc., which still requires approval by shareholders, would be the biggest acquisition yet in a string of Chinese corporate takeover bids abroad.
PetroKazakhstan's board of directors has approved the deal and its shareholders are to vote at a meeting expected to be held in October, said Beijing-based CNPC.
A successful takeover would add to a multibillion-dollar series of deals by China to acquire foreign oil and gas and to develop oil fields in countries as far-flung as Sudan, Venezuela and Australia.
The announcement comes three weeks after China's third-largest oil company, CNOOC Ltd., withdrew a multibillion-dollar bid for U.S. oil and gas producer Unocal Corp. after opposition by critics who said it might threaten American national security.
The takeover of PetroKazakhstan would add closer economic ties to growing strategic cooperation between China and Kazakhstan, which is expected to become one of the world's leading oil producers over the next two decades.
China is trying to increase its role in Central Asia, spurred in part by unease at the presence of U.S. military forces in the former Soviet region that borders Afghanistan.
Chinese President Hu Jintao visited Kazakhstan in July and signed an agreement with Kazakh President Nursultan Nazarbayev to develop a ``strategic partnership.''
The two governments already are partners in the Shanghai Cooperation Organization _ a six-nation security group led by Beijing and Moscow that is meant to combat Islamic extremism in Central Asia.
CNPC is China's biggest oil producer and the parent company of PetroChina Co. Ltd., whose shares are traded on stock exchanges in Hong Kong and New York.
CNPC says it is the world's 10th-largest oil company in terms of sales, reserves, production and refining capacity.
PetroKazakhstan is headquartered in Calgary, Alberta, but all of its operations are in Kazakhstan. It has been involved in joint ventures there since 1991 and bought a state-owned oil company, Yuzhneftegaz, in 1996 in the country's first major oil privatization.
The Canadian company says its proved and probable oil reserves stand at 550 million barrels.
CNPC already holds oil exploration and production licenses in Kazakhstan and is a partner with Kazak state oil company KazMunaiGaz in the construction of a US$700 million (euro585 million) pipeline to carry Kazakh oil to energy-hungry China.
Kazakhstan exports about 800,000 barrels of oil a day.
The CNPC offer would pay PetroKazakhstan shareholders a total of US$55 (euro45) per share _ US$54 (euro44) in cash, plus one share valued at US$1 (70 euro cents) in a new company that would pursue energy deals elsewhere in Central Asia, the Canadian firm said in a statement issued in London.
The offer represents a 21 percent premium over PetroKazakhstan's share price on Friday, the last day shares were traded, the firm said.
The agreement requires PetroKazakhstan to pay a breakup fee of US$125 million (euro100 million) should it accept another offer, CNPC said. It also allows CNPC to match any higher offer.