NLG Arria Nlg Ords

    28 October 2005

                      NELSON RESOURCES LIMITED ANNOUNCES                       
         CNPC INTENTION TO ASSERT PRE-EMPTION RIGHTS AT NORTH BUZACHI          

Nelson Resources Limited ("Nelson" or the "Company") of Bermuda (TSX/AIM: NLG), 
a leading oil exploration and production company operating in Kazakhstan, 
announces that it has been informed by China National Petroleum Corporation 
("CNPC"), the Company's joint venture partner on the North Buzachi oil field, 
that CNPC intends to take the necessary measures to exercise its pre-emptive 
right under the North Buzachi Joint Operating Agreement to acquire the 
Company's 50% interest in the North Buzachi field, following the purchase by 
Lukoil Overseas Holding Ltd. ("Lukoil") of a 65% controlling interest in the 
Company.

Nelson takes the position that no such pre-emptive right exists in the current
circumstances.

CNPC argues that the purchase by Lukoil of the 65% controlling interest in the
Company constitutes a transfer of the Company's participating interest under
the North Buzachi Joint Operating Agreement, dated December 16, 2003, between
CNPC and the Company's subsidiary Nelson Petroleum Buzachi BV. As a result,
CNPC asserts that the Corporation did not comply with the provisions of the
Joint Operating Agreement in connection with Lukoil's purchases. In that
regard, CNPC is asserting that they have certain pre-emptive rights to acquire
the Corporation's participating interest under the Joint Operating Agreement,
and that any transfer of the Corporation's participating interest to a third
party must be undertaken in accordance with the procedures under the Joint
Operating Agreement.

While CNPC has advised the Company that it will take the necessary measures to
exercise its pre-emptive right in accordance with the Joint Operating
Agreement, to the knowledge of the Company, no formal legal proceedings have
yet been commenced.

The Company takes the position that Lukoil's purchase of the 65% controlling
interest in the Company on October 14, 2005, does not breach the subject
provisions of the Joint Operating Agreement and no pre-emptive right arises in
the current circumstances. The Company therefore intends to oppose any measures
taken by CNPC to prove and exercise this right.

For further information, please contact:
----------------------------------------
Nick Greene, Chief Financial Officer          Tel: 020 7495 8908
Nelson Resources Limited                      ngreene@nelsonresources.co.uk

Fred Hodder                                   Tel: 020 7495 8908
Nelson Resources Limited                      fhodder@nelsonresources.co.uk

Investor Relations:
Ann-marie Wilkinson / Nick Lambert            Tel: 020 7861 3232
Bell Pottinger Corporate & Financial (London)



END

Arria Nlg Ords (LSE:NLG)
Historical Stock Chart
From May 2024 to Jun 2024

Arria Nlg Ords (LSE:NLG)
Historical Stock Chart
From Jun 2023 to Jun 2024