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32

Petrokazakhstan Holds The Fort

Shares of Canadian oil firm PetroKazakhstan declined, as Russia's Lukoil added uncertainty...

Shares of Canadian oil firm PetroKazakhstan declined, as Russia's Lukoil added uncertainty over PetroKazakhstan?s planned C$4.2 billion sale of the company to China National Petroleum Corp, ResourceInvestor.com reported.

PetroKazakhstan shares dropped by nearly 5% in early trading on the Toronto stock market Wednesday before recovering more than half to close at C$61.47, down C$1.76 or 2.8%.One of the chief concerns in the market was the Lukoil claiming that it had right of first refusal to buy PetroKazakhstan out of its stake in a joint venture called Turgai Petroleum.

PetroKazakhstan's half stake in Turgai represent nearly 20% of the company's estimated 550 million barrels of reserves.
Lukoil said Wednesday, that it had a ''pre-emptive right'' to buy out PetroKazakhstan's 50% stake of Turgai due to a shareholders agreement. Lukoil said it offered ''to hold negotiations'' about the Turgai ownership issue, but PetroKazkhstan ''did not consider itself bound'' by the agreement.

For its part, PetroKazkhstan said Lukoil's claim is just the latest salvo in a long-standing feud between the two companies that has also lead to both sides filing multi-million dollar lawsuits.

''We wrote them back and said: 'Hey listen, thank you for your letter, however this is not a trigger,'' spokesman Ihor Wasylkiw said late Wednesday. ''It will not cause you to be able to exercise your pre-emptive rights on Turgai Petroleum. Period.''