Will the Caspian purchase abate China's hunger for oil?

CNOOC and Sinopec try to stem the flow of oil imports with a $1.23 billion purchase in the Caspian sea.

China's increasing focus on obtaining reliable oil supplies, led CNOOC and China Petrochemicals, the parent company of Hong Kong-listed Sinopec, to spend $1.23 billion last week to each acquire half of a 16.33% stake British Gas BG held in the North Caspian Sea Project.

The project, said to be the largest discovery in the past 30 years, lies within the territorial waters of Kazakhstan and the Kashagan field alone has estimated reserves of 13 billion barrels of oil equivalent, although evolving extraction technology could push the figure higher.

The existing consortium which operates the field still has first right of refusal to buy the BG stake, although observers argue that it...

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