Hurricane Hydrocarbons (Canada) denies mass media information on activity of its partners in Kazakhstan

/IRBIS, March 13, 01/ - Hurricane Hydrocarbons Ltd (Calgary, Alberta, Canada) distributed press release dated March 6 that flatly denied information of some mass media on activity of Kazakhstan enterprises included in vertical group of Hurricane Hydrocarbons. The data submitted to Kazakhstan Stock Exchange by SHNOS OJSC (Shymkent) list following entities included into the group: SHNOS OJSC, Hurricane Kumkol Munai OJSC (HKM, Kzyl-Orda), Hurricane Overseas Services Inc. (Calgary, Canada), Hurricane Investments CJSC (Almaty), Hurricane-Dostyk LLP (Almaty) and Hurricane-Sairan LLP (Almaty). The group's activity is processing and selling of oil and oil products in Kazakhstan. Hurricane Hydrocarbons considers that hurried and mass distribution of unsubstantiated information is an indication of the nature of this information. The group suggests that certain entities have initiated an opposition campaign against Hurricane. Hurricane Hydrocarbons has denied information on number of issues. EVASION FROM TAXES BY HURRICANE OVERSEAS SERVICES INC. Earlier, IRBIS agency informed with the reference to GSRW (The Great Silk Road World News Agency, 7, Gainsford Street, London, SE1 2NE, U.K.): source from law enforcement bodies said the tax committee of the Medeu district of Almaty, found that Hurricane Overseas Services Inc. has not paid a total of KZT107.3 mln in taxes from 1998 to 1999. Legal proceedings have been initiated in compliance with the articles on tax evasion and violation. Hurricane Hydrocarbons Ltd informs that there is no substance to the reports of the alleged attempts by Hurricane to avoid payment of taxes or to disregard the laws of the Republic of Kazakhstan. Representatives of the State Revenue Ministry have accrued KZT155.0 mln in extra taxes on the base of the Documented Inspection Act. The company repaid full amount of taxes despite disagreement over methods applied by authorities in accruing taxes. "The Company's management has repeatedly confirmed and demonstrated in practice over many years of working in this country, its commitment to strictly adhere to all the laws and to abide by the standards prescribed for companies working in Kazakhstan" states press release. ACCUSATIONS THAT HURRICANE KUMKOL MUNAI (HKM) IS INJECTING BACTERIA INTO ITS RESERVOIRS Recent statements in certain media outlets (no sources have been given) that Hurricane Kumkol Munai is injecting anaerobic bacteria into the reservoir, for the purpose of enhancing production, are totally false. Hurricane Kumkol Munai has never injected bacteria into its reservoirs. Press release informs "Technical and research studies that Hurricane Kumkol Munai has carried out in conjunction with NIPImunaigas have shown that there is a possibility that anaerobic bacteria may be produced in the reservoir, late in the life of the development. In order to mitigate this effect and as recommended by the Institute, Hurricane Kumkol Munai is injecting bactericide and oxygen scavenger into the water that it is injecting into the reservoir to replace the oil that is being produced". GAS UTILIZATION ON KUMKOL OIL FIELD The press release clears situation concerning incorrect information on volumes of gas flared at Kumkol. "It was recently stated that Hurricane Kumkol Munai is flaring in excess of 230 million cubic meters of gas per year. In fact Hurricane Kumkol Munai is flaring approximately 130 million cubic meters of gas per year and is using 40 million for its own internal use, at Kumkol". Hurricane Hydrocarbons informs that it has selected a project for effective use of all the Company's produced associated gas. "This project will benefit the local environment as a result of a significant reduction in direct and indirect emissions into the atmosphere." The project would also cover lack of electricity in the region. Hurricane also informed that this project is being implemented according to the Government's resolution #1700 dated Nov.13, 2000 "On measures in achieving of power resource independence of Kazakhstan." Funding of this initiative was approved at a meeting of Hurricane Hydrocarbons' Board of Directors, held on February 23, 2001. Besides, Hurricane made some comment concerning accusation in forgery. "Forged company seals and documents discovered at Karamay oil base are in no way connected, nor have they ever been in the possession of SHNOS and more so, Hurricane, since ShNOS is not the owner of the oil base, simply the lessor of the oil base."