Court of Astana city arrested a share of PetroKazakhstan Inc. in Tourgai-Petroleum JV - Lukoil

/INTERFAX-KAZAKHSTAN, Astana, April 15, 05/ - Court of Astana arrested the whole 50% stake of Canadian PetroKazakhstan Inc. in a joint venture with Lukoil called Turgai-Petroleum, Boris Zilbermints, Kazakhstan regional director of LUKOIL Overseas (LUKOIL NC foreign projects operator), told Interfax- Kazakhstan Thursday. As known, Lukoil Overseas Kumkol B.V. (daughter of LUKOIL Overseas) and PetroKazakhstan Inc owns equal participation stakes in Turgai-Petroleum JV. Turgai-Petroleum in order to insure itself against losses due to failure to meet its obligations under export agreements seize the court with application for revocation of counter injunction. As such injunction all shares of PetroKazakhstan in Turgai-Petroleum were arrested, Zilbermints told. According to him a corresponding decision was adopted by the court of Astana city in February 23 of the current year, however information about it has not yet been disclosed. Lukoil Overseas representative noted that if Astana city court will adopt a decision about indemnification of losses incurred by Turgai-Petroleum and PetroKazakhstan will not execute it, then a share of a Canadian company in JV might be withdrawn through legal means and auctioned with the purpose of compensating the loss. B.Zilbermints explained that according to legal procedures, if any company has doubts about capability of a party to reimburse all losses, then this company may seize the court with application to arrest any other assets of the party. Because PetroKazakhstan Inc., which acts as a party in the process, operates no assets apart from stakes in daughter companies, then those shares may be considered as such asset, he added. B.Zilmernits informed that Lukoil Overseas and Turgai Petroleum intend to file a number of other claims against actions of PetroKazakhstan both to Kazakhstan and foreign courts. "We are preparing a number of claims and they are almost ready. It is hard for me to say the exact amount, but this will account for hundreds of million dollars... Part of claims will be directed to Kazakhstan courts, another - to international arbitrage, both from the side of Lukoil Overseas and Turgai-Petroleum", - B.Zilbermints. Lukoil Overseas representative noted that daughter structure of PetroKazakhstan - PetroKazakhstan Kumkol resources (PKKR) - has not yet fulfilled its obligations linked to Kazakhstan court decisions about reimbursement for losses incurred by a JV. Turgai-Petroleum and PKKR develop northern and southern parts of Kumkol fields (in KyzylOrda region). At that capacities for preparartion of a marketable crude of the JV are located at the territory of PKKR and belong to the latter. He noted that Turgai-Petroleum intends to file a claim, which seriously exceeds $100 m in relation to "forced method of oil selection at the own site", as a result of which for a number of years in a row, an oil overflow went to the site which belongs to PetroKazakhstan. Собеседник напомнил, что "ЛУКОЙЛ Оверсиз Кумколь Б.В." и "Тургай- Петролеум" уже обратились в арбитражные органы торговой палаты Стокгольма (Швеция) с предварительной суммой требований к PetroKazakhstan в размере $100 млн. As it is known those appeals are connected to unfair pay for oil supplied by Turgai-Petroleum to Shymkent refinery that belongs to PetroKazakhstan Oil Products LLP (PKOP, another daughter of PetroKazakhstan). B.Zilbermints told that agreements between shareholders of JV provide for a right of filling a claim to arbitrage courts of Stockholm. As informed previously PKKR in December of 2004 in unilateral form stopped accepting the oil supplied by Turgai-Petroleum, which is supposed to be delivered to a further transportation through KazTransOil (state-owned company) pipeline system. This led to violation of agreements on the part of Turgai-Petroleum. In this connection Turgai-Petroleum filed a claim with KyzylOrda interdistrict court which by its decision dated December 29, 2004 fulfilled its claims in full and obliged PetroKazakhstan to execute to contract including transferal of the oil to oil pipeline transportation system. Along with that the court fined PKKR for KZT1.7 bn having recognized the claims of Turgai-Petroleum legitimate. Moreover the court recognized the absence of liabilities on part of Turgai- Petroleum before PetroKazakhstan in relation to oil deliveries to a domestic market. At the same time those decision were ignored by PKKR. As LUKOIL Overseas representatives stated earlier, PKKR taking advantage of capacities at preparation of crude oil blocked the execution of export contracts by JV. LUKOIL Overseas think that a daughter company of PetroKazakhstan made use of a crude flow of Turgai-Petroleum trying to force JV to conclude an oil purchase and sale contract at a very low price with refinery. [2005-04-15]