Lukoil Sells 50% Stake in Kazakhstan to Sinopec

Russia’s Lukoil sold its 50% stake in Kazakhstan’s Caspian Investment Resources to China’s Sinopec for around USD 1.2 billion.   

“We carry out our activities in Kazakhstan and are interested in investment accrual there. The company intends to reallocate the investments to geologic exploration projects, including those in the Kazakhstan sector of the Caspian Sea. Besides, the company is expected to issue a tender for development of a construction project of a lube-production plant in the vicinity of Almaty in April of 2014,” Vagit Alekperov, Lukoil President, said in a note released on Tuesday.

After the sale of its shares in the company owning various stakes in four hydrocarbon-production projects in Kazakhstan, Lukoil will remain in the country with operations in Kumkol, Karachaganak and Tengiz.

It is unclear whether the divestment has to do with geopolitical developments or not, but there is little doubt on the fact that Chinese companies can take advantage of the situation. Beijing is not involved in the arm-wrestling between Russia and the West. That is why Chinese firms could easily buy Russian assets in case of escalations.