Nelson to oppose move by joint operator CNPC to buy out oil field interest
10/28/05 1:30:00 AM
TORONTO (CP) - Nelson Resources Ltd. said Friday it will "oppose any measures" taken by its Chinese operating partner to buy out its 50 per cent interest in a Kazakhstan oil field.
Nelson, a TSX-listed oil company active in the central Asian country, said it was informed by China National Petroleum Corp. that it intends to take the "necessary measures" to exercise its right to acquire Nelson's half-interest in the North Buzachi oil field, following Russian oil giant Lukoil's purchase of a controlling interest in Nelson.
"Nelson is of the position that no such pre-emptive right exists in the current circumstances," the Bermuda-based firm said in a release.
Last week, Nelson reported that Lukoil Overseas Holding Ltd. had bought 65 per cent of Nelson's common shares from its principal foreign shareholders. Lukoil had made a $2-billion-US offer in September and a definitive agreement was reached Oct. 13.
Nelson, formerly a Canadian-headquartered gold company, is expected to hold a meeting with shareholders on the controversial deal on Dec. 2.
However, the acquisition of a controlling interest in Nelson, according to CNPC, constituted a "transfer of the company's participating interest" under a 2003 joint operating agreement between CNPC and Nelson subsidiary Nelson Petroleum Buzachi BV, Nelson said Friday.
"As a result, CNPC asserts that the corporation did not comply with the provisions of the joint operating agreement in connection with Lukoil's purchases," Nelson added.
"In that regard, CNPC is asserting that they have certain pre-emptive rights to acquire the corporation's participating interest under the joint operating agreement" and that any transfer of that interest to another party must be done in accordance with that agreement, Nelson said.
CNPC had said it will take the "necessary measures" to exercise its right under the agreement, but Nelson said it was not aware of any formal legal proceedings.
The oil-gas firm said it would oppose any measures taken by CNPC, as Lukoil's acquisition didn't breach any terms of their agreement.
Nelson (TSX:NLG) started to acquire its half interest in the oil field in December 2003. Nelson and CNPC formed a joint operation company to operate the field, Buzachi Operating Ltd., which is managed equally by the two partners.
Lukoil and CNPC most recently battled over Calgary-based PetroKazakhstan Inc. (TSX:PKZ), which closed its $4.2-billion-US takeover by CNPC on Wednesday - China's biggest foreign acquisition.
The tug of war over the Canadian oil-gas company - all of whose operations are in Kazakhstan - ended this week when an Alberta court approved CNPC's bid for the company despite Lukoil's objections.
© The Canadian Press, 2005
Rogue
News 
Market Data 
Discover 
