CITIC eyes Indian operator to secure $2 bln Kazakh deal

SINGAPORE, July 10 (Reuters) China's CITIC Group is considering bringing in an Indian partner that would help operate Nations Energy assets as CITIC seeks to overcome opposition to its SINGAPORE, July 10 (Reuters) China's CITIC Group is considering bringing in an Indian partner that would help operate Nations Energy assets as CITIC seeks to overcome opposition to its $2 billion bid for the Kazakh producer, sources familiar with the matter said.

China International Trust and Investment Corp. (CITIC Group) has held talks to form such a partnership with ONGC Mittal Energy Ltd., a venture between state-run Indian giant Oil and Natural Gas Corp.

Ltd. (ONGC) and Mittal Steel, two sources told Reuters.

CITIC, a sprawling and diversified Chinese investment company with tiny oil interests in China and abroad, wants ONGC's operating expertise and Mittal Steel's relationship with the Kazakh government to help seal the takeover deal, they said.

The Kazakh government is worried about rapidly rising Chinese investment in its oil industry, and that is a factor behind the delay in the CITIC takeover, they said.

''The deal is that Mittal works the politics,'' said one of the sources, who asked not to be identified. ''ONGC brings in the operating expertise and CITIC brings in the money. That's pretty much the deal they are trying to do right now.'' ONGC, which has lost a string of international auctions of oil assets to Chinese companies in the past two years, was not competing for Nations Energy partly because it believes the CITIC bid has fully valued the target, another source said.

CITIC is the top bidder for Canadian-based firm Nations Energy, and its cash bid of about $2 billion is fully funded by a Chinese state bank, sources have told Reuters.

L.N. Mittal, a board member of ONGC-Mittal, declined to comment when he was approached by Reuters on the sidelines of a news conference in New Delhi on Friday.

Spokespeople at ONGC, CITIC and Nations have also declined comment.

Nations Energy, whose main asset is a large heavy oil field in Kazakhstan, wants to take CITIC's offer, sources said. With 4,000 employees, Nations Energy is owned by Indonesian investors including its president, Hashim Djojohadikusumo.

Top Chinese oil producer China National Petroleum Corp. is already a major oil producer in the oil-rich central Asian state, which pumps crude through a mega pipeline to northwestern China -- the world's second-biggest oil consumer.

CNPC recently bought PetroKazakhstan for $4.2 billion following tough negotiations with the Kazakh government, as part of Beijing's efforts to secure reserves amid rising imports.

CNOOC Ltd., China's third-largest oil group, was also in the running for the asset at one stage and hired Citigroup as its financial adviser. It later dropped the plan after winning the $2.7 billion auction of a Nigerian oil field.

CITIC Resources Holdings Ltd., a CITIC unit that is focusing more on the resources sector, initially planned to bid for Nations Energy but later decided to let its parent proceed because of the size of the target company.

Nations Energy produces about 50,000 barrels per day (bpd), mostly from the Karazhanbas field in Kazakhstan, says its Web site.

The field has proven reserves of more than 400 million barrels.

Karazhanbas was discovered in the 1970s, but output declined until Nations Energy bought it in 1997, raising production from 5,000 bpd in 1999 to 41,000 bpd in 2005, the Web site said.

(Additional reporting by Unni Krishnan in New Delhi) REUTERS DKS GC1600 billion bid for the Kazakh producer, sources familiar with the matter said.

China International Trust and Investment Corp. (CITIC Group) has held talks to form such a partnership with ONGC Mittal Energy Ltd., a venture between state-run Indian giant Oil and Natural Gas Corp.

Ltd. (ONGC) and Mittal Steel, two sources told Reuters.

CITIC, a sprawling and diversified Chinese investment company with tiny oil interests in China and abroad, wants ONGC's operating expertise and Mittal Steel's relationship with the Kazakh government to help seal the takeover deal, they said.

The Kazakh government is worried about rapidly rising Chinese investment in its oil industry, and that is a factor behind the delay in the CITIC takeover, they said.

''The deal is that Mittal works the politics,'' said one of the sources, who asked not to be identified. ''ONGC brings in the operating expertise and CITIC brings in the money. That's pretty much the deal they are trying to do right now.'' ONGC, which has lost a string of international auctions of oil assets to Chinese companies in the past two years, was not competing for Nations Energy partly because it believes the CITIC bid has fully valued the target, another source said.

CITIC is the top bidder for Canadian-based firm Nations Energy, and its cash bid of about SINGAPORE, July 10 (Reuters) China's CITIC Group is considering bringing in an Indian partner that would help operate Nations Energy assets as CITIC seeks to overcome opposition to its $2 billion bid for the Kazakh producer, sources familiar with the matter said.

China International Trust and Investment Corp. (CITIC Group) has held talks to form such a partnership with ONGC Mittal Energy Ltd., a venture between state-run Indian giant Oil and Natural Gas Corp.

Ltd. (ONGC) and Mittal Steel, two sources told Reuters.

CITIC, a sprawling and diversified Chinese investment company with tiny oil interests in China and abroad, wants ONGC's operating expertise and Mittal Steel's relationship with the Kazakh government to help seal the takeover deal, they said.

The Kazakh government is worried about rapidly rising Chinese investment in its oil industry, and that is a factor behind the delay in the CITIC takeover, they said.

''The deal is that Mittal works the politics,'' said one of the sources, who asked not to be identified. ''ONGC brings in the operating expertise and CITIC brings in the money. That's pretty much the deal they are trying to do right now.'' ONGC, which has lost a string of international auctions of oil assets to Chinese companies in the past two years, was not competing for Nations Energy partly because it believes the CITIC bid has fully valued the target, another source said.

CITIC is the top bidder for Canadian-based firm Nations Energy, and its cash bid of about $2 billion is fully funded by a Chinese state bank, sources have told Reuters.

L.N. Mittal, a board member of ONGC-Mittal, declined to comment when he was approached by Reuters on the sidelines of a news conference in New Delhi on Friday.

Spokespeople at ONGC, CITIC and Nations have also declined comment.

Nations Energy, whose main asset is a large heavy oil field in Kazakhstan, wants to take CITIC's offer, sources said. With 4,000 employees, Nations Energy is owned by Indonesian investors including its president, Hashim Djojohadikusumo.

Top Chinese oil producer China National Petroleum Corp. is already a major oil producer in the oil-rich central Asian state, which pumps crude through a mega pipeline to northwestern China -- the world's second-biggest oil consumer.

CNPC recently bought PetroKazakhstan for $4.2 billion following tough negotiations with the Kazakh government, as part of Beijing's efforts to secure reserves amid rising imports.

CNOOC Ltd., China's third-largest oil group, was also in the running for the asset at one stage and hired Citigroup as its financial adviser. It later dropped the plan after winning the $2.7 billion auction of a Nigerian oil field.

CITIC Resources Holdings Ltd., a CITIC unit that is focusing more on the resources sector, initially planned to bid for Nations Energy but later decided to let its parent proceed because of the size of the target company.

Nations Energy produces about 50,000 barrels per day (bpd), mostly from the Karazhanbas field in Kazakhstan, says its Web site.

The field has proven reserves of more than 400 million barrels.

Karazhanbas was discovered in the 1970s, but output declined until Nations Energy bought it in 1997, raising production from 5,000 bpd in 1999 to 41,000 bpd in 2005, the Web site said.

(Additional reporting by Unni Krishnan in New Delhi) REUTERS DKS GC1600 billion is fully funded by a Chinese state bank, sources have told Reuters.

L.N. Mittal, a board member of ONGC-Mittal, declined to comment when he was approached by Reuters on the sidelines of a news conference in New Delhi on Friday.

Spokespeople at ONGC, CITIC and Nations have also declined comment.

Nations Energy, whose main asset is a large heavy oil field in Kazakhstan, wants to take CITIC's offer, sources said. With 4,000 employees, Nations Energy is owned by Indonesian investors including its president, Hashim Djojohadikusumo.

Top Chinese oil producer China National Petroleum Corp. is already a major oil producer in the oil-rich central Asian state, which pumps crude through a mega pipeline to northwestern China -- the world's second-biggest oil consumer.

CNPC recently bought PetroKazakhstan for .2 billion following tough negotiations with the Kazakh government, as part of Beijing's efforts to secure reserves amid rising imports.

CNOOC Ltd., China's third-largest oil group, was also in the running for the asset at one stage and hired Citigroup as its financial adviser. It later dropped the plan after winning the SINGAPORE, July 10 (Reuters) China's CITIC Group is considering bringing in an Indian partner that would help operate Nations Energy assets as CITIC seeks to overcome opposition to its $2 billion bid for the Kazakh producer, sources familiar with the matter said.

China International Trust and Investment Corp. (CITIC Group) has held talks to form such a partnership with ONGC Mittal Energy Ltd., a venture between state-run Indian giant Oil and Natural Gas Corp.

Ltd. (ONGC) and Mittal Steel, two sources told Reuters.

CITIC, a sprawling and diversified Chinese investment company with tiny oil interests in China and abroad, wants ONGC's operating expertise and Mittal Steel's relationship with the Kazakh government to help seal the takeover deal, they said.

The Kazakh government is worried about rapidly rising Chinese investment in its oil industry, and that is a factor behind the delay in the CITIC takeover, they said.

''The deal is that Mittal works the politics,'' said one of the sources, who asked not to be identified. ''ONGC brings in the operating expertise and CITIC brings in the money. That's pretty much the deal they are trying to do right now.'' ONGC, which has lost a string of international auctions of oil assets to Chinese companies in the past two years, was not competing for Nations Energy partly because it believes the CITIC bid has fully valued the target, another source said.

CITIC is the top bidder for Canadian-based firm Nations Energy, and its cash bid of about $2 billion is fully funded by a Chinese state bank, sources have told Reuters.

L.N. Mittal, a board member of ONGC-Mittal, declined to comment when he was approached by Reuters on the sidelines of a news conference in New Delhi on Friday.

Spokespeople at ONGC, CITIC and Nations have also declined comment.

Nations Energy, whose main asset is a large heavy oil field in Kazakhstan, wants to take CITIC's offer, sources said. With 4,000 employees, Nations Energy is owned by Indonesian investors including its president, Hashim Djojohadikusumo.

Top Chinese oil producer China National Petroleum Corp. is already a major oil producer in the oil-rich central Asian state, which pumps crude through a mega pipeline to northwestern China -- the world's second-biggest oil consumer.

CNPC recently bought PetroKazakhstan for $4.2 billion following tough negotiations with the Kazakh government, as part of Beijing's efforts to secure reserves amid rising imports.

CNOOC Ltd., China's third-largest oil group, was also in the running for the asset at one stage and hired Citigroup as its financial adviser. It later dropped the plan after winning the $2.7 billion auction of a Nigerian oil field.

CITIC Resources Holdings Ltd., a CITIC unit that is focusing more on the resources sector, initially planned to bid for Nations Energy but later decided to let its parent proceed because of the size of the target company.

Nations Energy produces about 50,000 barrels per day (bpd), mostly from the Karazhanbas field in Kazakhstan, says its Web site.

The field has proven reserves of more than 400 million barrels.

Karazhanbas was discovered in the 1970s, but output declined until Nations Energy bought it in 1997, raising production from 5,000 bpd in 1999 to 41,000 bpd in 2005, the Web site said.

(Additional reporting by Unni Krishnan in New Delhi) REUTERS DKS GC1600 .7 billion auction of a Nigerian oil field.

CITIC Resources Holdings Ltd., a CITIC unit that is focusing more on the resources sector, initially planned to bid for Nations Energy but later decided to let its parent proceed because of the size of the target company.

Nations Energy produces about 50,000 barrels per day (bpd), mostly from the Karazhanbas field in Kazakhstan, says its Web site.

The field has proven reserves of more than 400 million barrels.

Karazhanbas was discovered in the 1970s, but output declined until Nations Energy bought it in 1997, raising production from 5,000 bpd in 1999 to 41,000 bpd in 2005, the Web site said.

(Additional reporting by Unni Krishnan in New Delhi) REUTERS DKS GC1600