CITIC unit buys Indonesian oil stake

CITIC Resources Holdings Ltd, a unit of state investment arm China International Trust & Investment Corp, has bought 51 percent of an Indonesian oil field for US$97 million.

The energy and base metals producer purchased a stake in the Seram Non-Bula block from KUFPEC, a subsidiary of Kuwait Petroleum Corp, gaining access to an oilfield with 39 million barrels of gross oil reserves, Bloomberg News reported.

Citic Resources wants to benefit from rising energy demand. China, the world's second-largest oil user, may consume 5.5 percent more crude next year, according to the International Energy Agency, after an estimated increase of 6.1 percent in 2006.

The acquisition "is an important step for the group's business development in the energy sector, and it is in line with its long term development strategy," the Beijing-based company said.

Citic Seram Energy Ltd, a wholly owned subsidiary, will be responsible for operating the field, which had average production of 4,300 barrels a day in the first half of this year.

Citic Resources shares rose 5.4 percent to HK$1.36 (17 US cents) yesterday in Hong Kong, their biggest gain in almost six weeks. The benchmark Hang Seng Index fell 1.3 percent.

Citic Resources' 2005 net income soared to HK$222 million last year from HK$4.77 million in 2004 as sales jumped 60 percent to HK$5.79 billion.

China is encouraging its oil companies to expand overseas to secure supplies for an economy that expanded 10.3 percent in the first quarter.