CNPC International Acquires PetroKazakhstan

On October 26, 2005, CNPC International Ltd. (CNPCI), a subsidiary of China National Petroleum Corp. (CNPC), China's largest state-owned oil company, acquired PetroKazakhstan Inc. by way of a plan of arrangement for a total consideration of US$4.18 billion in cash.

Under the terms of the acquisition, CNPCI agreed to pay US$55 per share, which represented a premium of approximately 22 per cent over the August 19 closing price of US$45.24 per PetroKazakhstan share, and a premium of 24.4 per cent based on the weighted average closing price per share on the New York Stock Exchange for the 20 previous trading days ending August 19, 2005.

PetroKazakhstan is a Canadian-based, TSX-listed energy company operating in Kazakhstan. It is engaged in the acquisition, exploration, development and production of oil and gas, refining of oil and the sale of oil and refined products. CNPC is one of the world's leading integrated energy companies and China's largest producer and supplier of crude oil and natural gas.

PetroKazakhstan was represented by in-house counsel Anthony Peart, and by Davies Ward Phillips & Vineberg LLP with a team that included Vincent Mercier, Edward Hannah, Jim Reid, Brooke Jamison, Kevin West and Richard Fridman (corporate), Ed Babin and Matthew Milne-Smith (litigation), John Zinn and Stephen Ruby (tax) and Gerald Shepherd (corporate, New York). Mark Bergman from Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as US counsel to PetroKazakhstan, and Burnet, Duckworth & Palmer LLP acted as Alberta counsel with a team that included Daniel McDonald, Q.C., Paul Beke and Grant Zawalsky. Bill Orr (corporate governance), John Sabetti (corporate) and Murray Braithwaite (research) of Fasken Martineau DuMoulin LLP advised the special committee of independent directors of the board of directors.

CNPCI was represented by in-house counsel Bi Jingshuang, and in Canada by Osler, Hoskin & Harcourt LLP with a team that included Clay Horner, Douglas Bryce and Adam Grabowski (corporate), Patrick Marley (tax) and Tris Mallett (litigation). LeBoeuf, Lamb, Greene & MacRae LLP acted as international counsel to CNPCI with a team that included Ingrid Zhu-Clark and Christopher Flood (Beijing), Lynn McCaw, Nicholas Rochez, Peter Holt and Melanie James (London), Brian Zimber (London and Kazakhstan) and Bill Lamb and Fritz Lark (New York). Douglas Powrie and Tom Bauer of Thorsteinssons LLP acted as tax counsel to CNPCI in respect of certain aspects of the transaction.