CNPC AND PETROKAZAKHSTAN SIGNED MOU

Info-Prod Research (Middle East), October, 2005

According to fdi.gov.cn: The Globe and Mail reported that a binding MOU was signed on October 15 between China National Petroleum Corp. ("CNPC") and PetroKazakhstan Inc. ("PK") CNPC agreed to sell 33% of its stake in PK acquired in August this year back to the company for a total consideration of USD 1.4 bn.

Based on the MOU, PK will retain a stake necessary for the state to strategically control the development of mineral resources and will obtain the rights to co- manage the Chimkent Refinery and refined oil products under equal conditions. According to industry insiders, the move has laid a solid foundation for CNPC to successfully acquire PK and resolve the dispute between China and Kazakhstan.