China's sovereign wealth fund, China Investment Corporation closed its first phase settlement in the US$ 300 million acquisition of a 45% stake in Nobel Oil Group, according to Chinese state-owned media.
The settlement relates to the first lot of payment due end September, in a two-installment payment schedule for a share in the Russian oil company. China Investment Corp., or CIC, had spent US$ 100 million for holding Nobel stakes and US$ 50 million as operating expense of the oil fields.
The corporation indicated that the remaining payment of US$ 150 million due in the second phase, in about nine months time, would be paid off to buy oil and gas reserves amounting to 150 million barrels around existing ones. Upon completion of the purchase, CIC will hold 45% of the company with the Russian company holding 50% and the remaining 5% held by a Hong Kong investor.
The deal was CIC's second effort in a month to acquire stakes in foreign oil and gas companies, having paid US$ 939 million end September for a share in a Kazakh oil and gas producer, KazMunaiGas Exploration Production.
China Investment Corporation was set up in September 2007 with a capital of US$ 200 billion, predominantly from China's massive foreign exchange reserves, and also has stakes in Blackstone Group and Morgan Stanley acquired in 2007.