Court imposed $13 m fine on PetroKazakhstan's affiliate in favor of Tourgai petroleum - JV

/INTERFAX-KAZAKHSTAN, Almaty, March 29, 05/ - KyzylOrda specialized interdistrict court satisfied financial claims of Tourgai-Petroleum, a joint-venture, against PetroKazakhstan Kumkol Resources (PKKR, a 100% affiliate of Canadian PetroKazakhstan). "On March 14, 2005 KyzylOrda specialized interdistrict court decided to impose a fine of KZT1.7 bn (nearly $13.1 m) in favor of Tourgai-Petroleum CJSC as reimbursement for losses due to delay in oil export in December of 2004", the official statement released on Tuesday says. As informed, a joint venture is owned by Russian Lukoil Overseas and PetroKazakhstan on a parity basis. Moreover, the statement says, pursuant to abovementioned decision dated March 14 the court confirmed absence of obligations of Tourgai-Petroleum before PetroKazakhstan in respect of oil delivery to local market. "The decision proves the groundlessness of statements published earlier by PetroKazakhstan to the management of Tourgai-Petroleum about violation of agreements on marketing, including delivery of petroleum on domestic market that follows from series of agreements on oil pipeline consortium Keniak- Aryskum-Maibulak (KAM)", the release says. According to the statement, the issue on expenses reimbursement of Tourgai Petroleum due to stoppage in oil production in December 2004 and January 2005 is separated from other cases and will be considered in near term. According to press-release of JV, in violation of existing agreement, PKKR in unilateral order topped from December 27, 2004 the acceptance and transferal into oil pipeline system of KazTransOil (state-run transportation company) of oil produced by Tourgai-Petroleum. In this connection Tourgai-Petroleum directed a claim to KyzylOrda specialized interdistrict economic court, which by enacting a decision dated December 29, 2004 satisfied all claims and obliged PKKR to perform its obligations provided in an agreement including transferal of oil produced by JV to the system of KazTransOil for further transportation for export. "Regardless the fact that the decision took effect in December 2004 and that it was confirmed by appeal body, PKKR intentionally and without any legal rights refused to perform its obligations", the release says. The release stresses that as a result Tourgai-petroleum failed to meet its obligations on export delivery in both December 2004 and in a period from January - February 2005. "Taking advantage of the fact that capacity on preparation of oil produced by Tourgai-Petroleum" and its further transportation into the system of KazTransOil belong to PKKR, the latter blocked the execution of export contracts", the statement says. Moreover, as the statement points out, PKRR "was making orders managing flows of product of Tourgai-Petroleum independently, trying to force JV to sign a contract of oil purchase and sale at lower prices with its downstream arm - PetroKazakhstan Oil Products (owner of Shymkent Refinery in southern region of Kazakhstan). Such actions from the side of PetroKazakhstan violate the decision of Southern Kazakhstan specialized interdistrict economic court dated January 7, 2005", the release states. It reminds that the court obliged PetroKazakhstan to conclude a contract with Tourgai-Petroleum on industrial oil refining. The decision took effect from February 9 of the current year after refusal of appeal of PetroKazakhstan by higher echelon. Interfax-Kazakhstan does not have any official stance of PetroKazakhstan and its structures with respect to the issue. Tourgai-Petroleum and PKKR develop northern and southern parts of Koumkol (KyzylOrda oblast in the southern Kazakhstan) oil field respectively. However, the facilities required to produce stock-tank oil are located at the cite of PKKR and belong to the latter. [2005-03-29]