China buys up more Kazakhstan oil

Kazakhstan has rich fuel reserves

China has moved to increase its energy supplies by spending $1.9bn (£1bn) on Kazakh oil reserves.

The oil and gas field, owned by Canada's Nations Energy, is said to produce more than 50,000 barrels of oil a day and hold 340 million barrels.

The purchase, by state-owned China International Trust & Investment (CITIC), is set to complete in December but needs Kazakh government approval.

Last year, China National Petroleum bought PetroKazakhstan for $4.2bn.

Kazakhstan's energy riches

China is the world's fastest-growing major economy and is the second biggest consumer of oil, but it has to import almost half of its needs.

Analysts have said that China may face difficulties in transporting the new oil reserves.

Situated in the Karazhanbas field in the west of Kazakhstan near the Caspian Sea, the reserves must be transferred to a new pipeline to China that starts in the middle of Kazakhstan.

There are plans to extend the pipeline westwards and CITIC said in a statement that it would look at building an oil refinery close to Karazhanbas.

The US is also a major investor in Kazakhstan's oil and gas industry, which is expected to pump more than 3.5 million barrels of oil a day in the coming decade.

Kazakhstan has ambitions to pump up to 45 billion cubic metres of natural gas a year by 2015, and there has been talk of building a massive trans-Caspian pipeline to serve the European market.