KAZAKHSTAN - CNPC/AktyubinskMunaiGaz.

An association privatised, AMG went to China's CNPC in mid-1997 which acquired 60% of its shares, against competition from Exxon, Texaco and Amoco. CNPC paid a signature bonus of $325m for this and pledged to invest $4.4 bn to re-explore and develop AMG's fields, linked to China by pipeline (see Part 3). AMG has a major oilfield, Zhanazhol, which all foreign companies approached in the 1990s wanted to get in a separate deal. Its other major fields are Kenkiyak and Sinelnikov.

AMG fields, in the Aktyubinsk (or Aktobe) region in north-western Kazakhstan, have proven and probable reserves exceeding 1 bn barrels. Together they produce 120,000 b/d, up from 65,000 b/d in mid-2002, and varying volumes of gas. CNPC's target of 200,000 b/d by 2002 is not likely to be reached before 2009 or 2010. The output is consumed in China. A 232 km natural gas pipeline from Zhanazhol to Aktyubinsk came on stream in early 1999. Kazakh officials said Zhanazhol supplies cut Russian gas imports by 60% from 1 BCM/year.

A 24-inch, 450-km crude oil pipeline with a capacity of 100,000 b/d built by Stroitransgaz of Russia from Kenkiyak to Atyrau near the Caspian Sea came on stream in March 2003. This has allowed AMG to be one of the users of the CPC system, exporting crude oil to the Mediterranean. (AMG had been heavily indebted, over-staffed and in need of big capital to modernise its operations. Its thousands of old and idle wells have to be replaced.