CHINA further strengthened its position in oil-rich Kazakhstan on Tuesday with its State firm Sinopec Corp. paying US$1.2 billion to buy out Russia’s No.2 oil producer Lukoil from a venture there.

    Sinopec, Asia’s largest oil refiner, will become the sole owner of Caspian Investment Resources Ltd. after the deal is completed before the end of 2014, Lukoil said.

    Lukoil’s 2013 share of production through the venture was around 30,000 barrels per day and output from various small fields that the venture controls will soon or has already peaked.

    Kazakhstan holds 3 percent of the world’s recoverable oil reserves and is the second-largest former Soviet oil producer after Russia.

    Its three biggest projects — Tengiz, Karachaganak and Kashagan — are controlled by Western oil majors and the Kazakh state company.

    Chinese firms have been expanding aggressively in ex-Soviet central Asia, building pipelines to send oil and gas directly back home. In Kazakhstan, they have accumulated ownership of small and mid-sized energy projects over the past decade.

    The biggest Chinese venture in Kazakhstan is run by Sinopec’s rival CNPC and is producing a total of 50,000 barrels per day.

    Kazakhstan produces around 1.7 million barrels per day and 240,000 barrels per day already go directly to China.

    Caspian Investment Resources’ fields are located mainly in the western part of Kazakhstan which means that some oil will continue flowing to Europe via Russia as opposed to going directly to China. (SD-Agencies)