China has asked Kazakhstan to sign off on a US$1.9 billion takeover offer by a Chinese company for Kazakh oil assets.

China International Trust & Investment Corp made the offer for the assets of Nations Energy Co, a Kazakhstan-based oil producer, last month.

Karim Massimov, Kazakhstan's deputy prime minister, said the Chinese government asked for approval of the takeover last week, when he visited China. Kazakhstan is considering the request, Massimov said in an interview in London yesterday.

"The question is being examined, but no decision has been made," he said.

The Kazakh government has the right to make a preemptive offer for Nations Energy. KazMunaiGaz, the national oil producer, used similar rights to join an Eni SpA-led project in the Caspian Sea and to gain a stake in a Kazakh producer that was acquired last year for US$4.2 billion by China National Petroleum Corp.

Blocking rights

"The government has a right to block any transaction in the interests of national security," Massimov said.

Citic Group, as the Chinese company is called, agreed on October 26 to buy the Kazakh oil assets of Nations Energy, which is registered in Canada. Those assets include development rights to the Karazhanbas oil and natural-gas field, an oil-transportation company and oil-field services operations.

Nations Energy's owners have been looking to sell the business for about two years. Russia's OAO Lukoil and OAO Gazprom and India's Oil and Natural Gas Corp were interested in bidding for the company.

The owners may have to pay about US$380 million in taxes if the company is sold after January 1. A Kazakh law goes into effect then that imposes a 20 percent charge on the sale by non-residents of assets that have a majority of their value in the country.

"We will make a decision in the interest of the Kazakh people," Massimov. "Deadlines are not important."

Citic and Nations Energy plan to complete the transaction in December, Nations Energy said on October 26.