KazTransOil NOTC CJSC (Kazakhstan) - Brief Information

/IRBIS, Oct 19, 00/ - Below is brief characteristic of KazTransOil NOTC CJSC composed using materials of the Kazakhstan Stock Exchange (KASE) Listing Commission. The information is published in connection with inclusion of the Company's bonds in the official list of KASE securities, category "A". GENERAL INFORMATION Date of first government registration - May 14, 1997. Legal and organisational type of liability - closing joint-stock company. Ownership form - private, 100% stake is owned by the government. Juridical address: 60 Republic av., Astana 473000, Kazakhstan. Actual; Address of head office: 14, Bukeikhan street, Astana 473000, Kazakhstan. Major activities: oil transportation services including pipe-line, sea and rail-road transportation, oil products and water transportation, discharge and pumping of oil. KazTransOil NOTC CJSC was created with the purpose to maintain economic interest of Kazakhstan in field of transportation, exports and imports of oil and oil products. It was targeted to optimise oil transportation companies management and to draw investments to develop appropriate infrastructure. One of the company's objective is to maintain unified tariff policy for all clients of trunk pipe-line network. LICENSES OF THE ISSUER - Government general license of the Ministry of Energy Power Resources, Industry and Trade (MPPIT) of the Republic of Kazakhstan #0001130 dated Sep 02, 1998. Meaning: Oil pipe-line operations. - Government general license of the Ministry of Energy Power Resources, Industry and Trade (MPPIT) of the Republic of Kazakhstan #0001133 dated Sep 02, 1998. Meaning: Operations with industrial explosive and fire-risk facilities. - Government license of the State Fire Fighting Service Department of the Emergency Agency of the Republic of Kazakhstan #0000638 dated Aug 01, 2000. Meaning: Assembling, tuning and engineering services of fire alarm and fire fighting equipment in Kazakhstan. Expire date - Aug 01, 2001. - Government license of the Construction Activity Committee of the Republic of Kazakhstan #000852 dated Apr 03, 1998 (confirmed on May 22, 2000). Meaning: Execution of survey, design and construction-and- mounting activities in Kazakhstan and CIS countries. The license is to be confirmed annually. KazTransOil Department for Oil Pipe-lines Operation and company's branches currently prepares the application forms to obtain other licenses from the MPPIT. The license gives right to assemble and repair high- pressure boilers, vessels and pipe-lines. Another one will permit the transmission and distribution of electric-power. One of the company's need is to obtain license from Atomic Energy Committee. This license permits activity with ionising radiation equipment for operations over pipe-line diagnostics and welded connections using non-destructive tests. CAPITAL, SHARES AND SHAREHOLDERS As of July 01, 2000 the announced authorised capital totalled KZT19,406,071.0 thousand and was fully paid up. Total number of shares is 19,406,071 (only ordinary registered shares) at face value of KZT1,000.0. The singly constitutor and owner of the company's 100% shares is the Government of the Republic of Kazakhstan. According to the government resolution #980 dated June 17, 1997 "On the State Property and Assets Management Department of the Republic of Kazakhstan", this department was selected as the body that possesses the ownership, user and disposal rights over state property, and KazTransOil in particularly. According to the another decree of the Government "On transferring of ownership and user rights over government share holdings and state blocks of shares in companies included into government property" #659 dated May 27, 1999, the State Property And Privatisation Committee of the Ministry of Finance transferred to (MPPIT) the ownership and user right over KazTransOil. HISTORY AND BRIEF CHARACTERISTIC The company was founded according to the government resolution #461 dated Apr 02, 1997. The resolution merged Uzhnefteprovod (English transcript: Southern Pipelines) and Magistralniye Nefteprovody Kazakhstana and Srednei Azii (Kazakhstan and Central Asia Trunk Pipe-lines), two republican and government companies into KazTransOil NOTC CJSC. The latter is successor of all assets and liabilities of the named entities. The entity was registered in Almaty Justice Department on May 14, 1997 as closed joint-stock company. In early 1999, the company's head office was reallocated to Astana, where it was registered in Astana Justice Department on Apr 20, 1999 (according to the certificate ##6636-1901-AO). The company's personnel excluding branches amounts to 6,773 as of July 01, 2000. The company has shares in following organisations (as of Jan 01, 2000): - Kaspiimunaibailanys OJSC: share in authorised capital - 90%; shareholders equity - KZT719,829 th; - Aktobeneftesvyaz OJSC: 90%, KZT127,741 th.; - Transpetroleum CJSC: 100%, KZT621,380 th.; - Kaztransgas CJSC: 100%, KZT72.5 th (hereafter - authorised capital figure is given); - EIF Munaiimpex LLP: 99%, 46,200 th - EURO-ASIA AIR Aircompany OJSC: 100%, KZT268,080 th.; - Halyk Bank Kazakhstan APF CJSC: 20.8%, KZT183,000 th. The main production activity of KazTransOil consists of oil transportation. About 80% of total crude oil produced in Kazakhstan is transported using KazTransOil pipe-line network. The company also maintain water pipe-line and oil field in the Western Kazakhstan. There are several destination and loading points in the pipe-line system: external junctions (Atyrau-Samara pipe-line at the Western branch and Zhanazhol-Orsk at the Actobe branch), oil refining plants (ORP) - Atyrau refinery (Western branch), Pavlodar and Shymkent refineries (Eastern branch), loading rail-road terminals on pump-stations at Atyrau and Makate (Western branch), sea oil loading terminal in the Aktau sea-port. The KazTransOil structure consist of 3 branches managing operations over trunk pipe-lines: Eastern branch - 2,574 km pipe-line (North-South direction) and 14 oil-pump stations, Aktobe branch - Zhanazhol-Orsk including 2 lines, each one is 360 km long, Western branch having the most branching network of pipe-lines (2,367 km, of which 1,232 km is unique "hot" pipe-line Uzen-Atyrau-Samara passing through heating equipment) and water pipe- line (3,087 km), 22 oil and 6 water pumping stations as well as Aktau sea- port. As of Jan 01, 2000 KazTransOil operates over 5,844 km of pipe-lines (without Caspian Pipe-Line Consortium; 3,087 km of water pipe-lines without CPC), 39 oil and 6 water pumping stations, 4 loading platforms (1 in Aktau sea-port) and 2 unloading platforms, total reservoirs of 1.2 mln cubic meters capacity. Volume of oil transportation in KazTransOil network directly depends on oil production in Kazakhstan. From 1997 to 1999, oil transportation increased by 8.2% and totalled 25.0 mln tons, proceeds from rendered services rose by 80% and totalled KZT17.7 bln, cost of services rendered increased by 15% and amounted KZT10.1 bln. The biggest share of oil transportation falls on Western branch - 60%. The company forecasts that it will transport 27.8 mln tons of oil by the end of 2000. The receipts from services will approximately equal KZT34.4 bln. Increase in oil production expected in Kazakhstan (till 2003) could result in raise of transportation volume to 32.5 mln tons. Net profit of KazTransOil in 1998 increased 4 times, in 1999 - 6 times and totalled KZT5.7 bln. The profits increased not only due to rise in transportation volumes and decrease in expenditures but also because of increase in transportation tariffs (beginning from March 16, 2000 - $15 for 1 ton per 1000 km. in all branches; in 1998 in Aktubinsk branch $3, Western - $7.13, Eastern - $9.6). Starting from 1998 tariffs are set in the US dollars. Company's clients are 19 oil-gas production entities. The biggest are: Tengizchevroil JV LLP (about 35-37% of total transportation volume), Mangistaumunaigas OJSC, KAZAKHOIL NOC CJSC, Hurricane Kumkol Munai OJSC, Aktobemunaigas OJSC. KazTransOil renders services at 100% monthly prepayment. Seventy three percents of 25 mln tons of oil produced by company's clients in 1999 are transported through KazTransOil (Samara - 42%, Orsk refinery - 7%, SHNOS - 165, ANPZ OJSC - 7%, PNPZ PJSC - 3%). Rail-road and sea loading totalled 14 and 8% consequently. MAJOR PROJECTS WITH KAZTRANSOIL PARTICIPATION Caspian Pipe-line Consortium (CPC). Besides participation in the project, the company also maintain and technically support fixed assets of the project including main oil-pumping station in Tengiz. Preliminary capacity of the pipe-line is 28 mln tons with further increase up to 67 mln tons per year. The construction cost of first line (capacity - 28 mln tons) is $2.2 bln per year. At capacity of 67 mln tons is $4.5 mln. The project will be put in operation on June 30, 2001. Atyrau-Samara pipe-line reconstruction and modernisation project. The realisation of the project will provide additional export capacities to Kazakhstan companies. The pipe-line increase in capacity from 12 to 15 mln tons per year will be mainly directed to European market. The project cost is $33.6 mln. Pay-back period is 4-5 years. Kenkiyak-Atyrau pipe-line project. The project will provide access of Aktubinsk region oil-fields to the Atyrau-Samara and CPC as well. Preliminary cost of base project (6 mln tons capacity) is $194.1 mln at world prices. Kumkol head oil-pumping station project. Project cost is KZT1.5 bln. Object - stability of the Kumkol-Karakoin pipe-line operation. Pavlodar-Shymkent pipe-line reconstruction project. Reconstruction of Karakoin-Atasu segment. Object - oil transportation from Kumkol oil field to Atasu oil-loading platform. Costs - KZT11.3 mln. Reconstruction and expansion of Aktau sea part and organisation of tanker transportation. The oil (6 to 12 mln tons) will be transported to Iran and Makhachkala-Novorossiisk direction. Project cost $25 to $96 mln. Western-Kazakhstan - Alashankou (China) export pipe-line construction. It will link western oil regions with oil refinery in Shymkent and Pavlodar. Initial capacity - 20 mln tons. Project cost - 20 mln tons per year. Kazakhstan-Turkmenistan-Iran pipe-line construction will provide the most favourable access to Asian-Pacific region through Persian Gulf. Preliminary data shows that capacity of the Kazakhstan segment will equal 25 mln tons. Project cost - $450-600 mln. Western Kazakhstan-Baku-Jeikhan pipe-line construction. Expansion of internal and export oil-gas transportation systems of the Caspian region. Length in Kazakhstan - 659 km, Azerbaijan - 491 km, Georgia - 218 km, Turkey - 957 km. Estimations of construction capital cost - $3.9 - $5 bln depending on tax regime, preferences in participating countries.