Turgai Petroleum files a new claim against PetroKazakhstan

/INTERFAX, Moscow, May 17, 05/ - Turgai Petroleum CJSC (a joint venture between Russian NC LUKOIL and Canadian PetroKazakhstan Inc.) Kyzylorda specialized interdistrict economic court (Kazakhstan) filed a new claim against PetroKazakhstan Kumkol Resources (PKKR), PetroKazakhstan Inc's daughter company, about return of 394,719 tons (nearly 3 m b) of crude. As informed, in compliance with oil production specification a crude extracted by Turgai Petroleum is transferred to PKKR for initial processing and further transportation via KazTransOil pipeline. However in December of 2004 PKKR violated agreement provisions and suspended crude acceptance and transporation via pipeline", release of LUKOIL Overseas reads. On December 2004, Kyzylorda specialized interdistrict court obliged PKKR to transfer crude to a pipeline system of KazTransOil ar Turgai Petroleum request. In first quarter of 2005 out of 891,521 tons transferred by Turgai Petroleum to PKKR only 476,802 tons was delivered to a pipeline system of KazTransOil in compliance with prescription of Turgai Petroleum. The announcement states that 20,000 tons could not be dispatched due to the interim relief imposed by the court filed earlier by PetroKazakhstan Inc., which has since been recalled. Essentially, PKKR arbitrarily disposed of 394,719 tons of Turgai Petroleum crude oil thus inflicting material damage on Turgai Petroleum. As informed Turgai Petroleum forwarded the Claim Letter to PKKR with requirement to return the remaining part of oil, but PetroKazakhstan rejected the letter referring to existing oil delivery agreements both with Litasko, LUKOIL's daughter company, and Shymkent refinery (belongs to PetroKazakhstan). "Since the beginning of 2005 there have been a number of other legal actions between Turgai Petroleum and subsidiaries of PetroKazakhstan Inc., which have resulted in damage awards and other court decisions in favor of Turgai Petroleum. The previous efforts of Turgai Petroleum and LUKOIL Overseas Kumkol B.V. (LUKOIL Overseas) to fairly resolve their commercial disputes with PetroKazakhstan Inc. through direct negotiations have been rejected." "Regrettably, instead of working to address the legitimate claims of Turgai Petroleum and LUKOIL Overseas, PetroKazakhstan Inc. has chosen to publicly attack Turgai Petroleum and LUKOIL Overseas with the clear intention of harming their reputation. LUKOIL Overseas categorically reject the claims made by PetroKazakhstan Inc. and are confident that the legal system will ultimately uphold position and rule in favor of LUKOIL Overseas", the release says. Turgai Petroleum and PKKR develops northern and southern part of Kumkol oilfield respectively. Disputes between shareholders of Turgai Petroleum JV and its managers with PetroKazakhstan representatives have been lasting for several months. Parties allege each other in wrongdoing and have already filed a number of claims. [2005-05-17]