CIC concludes 1st phase oil buy
Source: Xinhua |
October 17, 2009, Saturday
|
Print Edition
Print Edition
China Investment Corp, the nation's sovereign wealth fund, yesterday announced it had closed the first phase settlement for the purchase of a 45-percent stake in Nobel Oil Group.
The US$300-million investment would be completed in two phases. In the first phase, which was completed by the end of last month, CIC had spent US$100 million to hold the Russian oil company's stakes, and US$50 million for operating expense of the oil fields, according to the announcement.
It said that the remaining US$150 million would be paid off in the second phase, in nine months, to buy oil and gas reserves amounting 150 million barrels.
When the purchase was done, CIC will hold 45 percent of the company's stake. The Russian company will own 50 percent, and the remaining 5 percent will go to a Hong Kong investor.
This was CIC' second move within one month to buy shares in overseas oil and gas companies. At the end of last month, CIC paid US$939 million for a stake in Kazakhstan oil and gas company JSC KazMunaiGas Exploration Production.
Zhuang Jian, a senior economist with the Asian Development Bank, said that under the forecast of excessive fluidity and devaluation of the US dollars, CIC's investment in bulk commodities like oil and gas would be a better option to mitigate risks in China's huge foreign exchange reserves.
These deals show that CIC is attaching more attention to resource commodities and intends to diversify its assets arrangement from its early preference of investing in financial sectors, said Chen Fengying, director of Institute of World Economic Studies under China Institute of Contemporary International Relations.
Chen also said that future price hikes of resource commodities, resulting from the devaluation of the US dollar and recovery of the world economy, might bring better profits to CIC.
The US$300-million investment would be completed in two phases. In the first phase, which was completed by the end of last month, CIC had spent US$100 million to hold the Russian oil company's stakes, and US$50 million for operating expense of the oil fields, according to the announcement.
It said that the remaining US$150 million would be paid off in the second phase, in nine months, to buy oil and gas reserves amounting 150 million barrels.
When the purchase was done, CIC will hold 45 percent of the company's stake. The Russian company will own 50 percent, and the remaining 5 percent will go to a Hong Kong investor.
This was CIC' second move within one month to buy shares in overseas oil and gas companies. At the end of last month, CIC paid US$939 million for a stake in Kazakhstan oil and gas company JSC KazMunaiGas Exploration Production.
Zhuang Jian, a senior economist with the Asian Development Bank, said that under the forecast of excessive fluidity and devaluation of the US dollars, CIC's investment in bulk commodities like oil and gas would be a better option to mitigate risks in China's huge foreign exchange reserves.
These deals show that CIC is attaching more attention to resource commodities and intends to diversify its assets arrangement from its early preference of investing in financial sectors, said Chen Fengying, director of Institute of World Economic Studies under China Institute of Contemporary International Relations.
Chen also said that future price hikes of resource commodities, resulting from the devaluation of the US dollar and recovery of the world economy, might bring better profits to CIC.
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