Kazakhstan plans to hinder the sale of Nations Energy's oil assets to China International Trust & Investment Corp. (CITIC), Kazakh Energy and Natural Resource Minister Baktykozha Izmukhambetov said on November 15.

He said that Kazakhstan should take emergency measures to halt this agreement on Karazhanbasmunai.

Izmukhambetov said that the Chinese ambassador has sent him a letter with a request to meet with CITIC managers.

The Karazhanbas field is Nations Energy's main oil asset in Kazakhstan. The company daily extracts 50,000 barrels of oil equivalent and has 340 million barrels in reserves.

Oil from the Karazhanbas field is transported via the pipeline system owned by Kaztransoil, a KazMunaiGaz oil transportation subsidiary, and is delivered to the Atyrau refinery. The company exports oil via the Caspian port of Aktau to markets in Eastern Europe via ports on the Mediterranean and Black Sea coasts.

Nations Energy said in a press release at the end of October that CITIC is to acquire its assets in Kazakhstan for USD 1.9 billion. The deal was to be completed in December. However, according to Kazakh law, the state has priority right to buy up assets in production sectors in the republic, if a decision is reached to sell them.

China is continuing to strengthen its position in the Kazakh oil and gas production sector - following the acquisition of PetroKazakhstan by CNPC for USD 4.2 billion last year.

At the start of November some Kazakh parliamentary deputies expressed concern about the increased presence of foreign companies in the Kazakh oil and gas sector. "Before our eyes a lot of work is being carried out [for China] to acquire a number of oil companies working in Kazakhstan," deputy Valery Kotovich said.

"I have figures that say that if it buys these companies China will control about 28 percent of production in the country. If a deal that is currently being carried out with Mangistaumunaigaz is closed, this indicator will exceed 40 percent of production in Kazakhstan," the deputy said.

The Chinese side is currently developing a number of large fields in western and southern Kazakhstan. Last year an oil pipeline was built from Kazakhstan to China with an initial capacity of 10 million tonnes of oil, to be doubled later.