PetroKazakhstan

PetroKazakhstan was a Canadian oil company, based in Calgary, that had much of its business focused on Kazakhstan where it had some convert|550|Moilbbl|m3 of oil and convert|25|Gcuft|m3 of natural gas reserves (January 2005 estimate) in the Turgai basin region. These are the second largest Kazakhstani proven reserves after ChevronTexaco's TengizChevroil. Estimated production is convert|165000|oilbbl|m3 of oil per day. In 2005, PetroKazakhstan was acquired by China National Petroleum Corporation .

Formerly known as Hurricane Hydrocarbons Ltd. the company was founded in 1981 and initially operated in Western Canada. It changed to a more international focus and grew after making several major oil finds in Southern Kazakhstan. In 1996 it purchased Yuzhneftegaz from the Kazakh government, making it one of the largest players in the country.

However the company ran into severe problems in the late 1990s. All the company's oil went through refineries owned by Central Asian Industrial Holdings, which used their monopoly to charge high prices. At the same time oil prices plunged. In 1999 the company was forced into receivership and almost broken up.

The company was saved by Bernard Isautier, a board member who had long been involved in the Canadian oil industry and in Central Asia. He became CEO and negotiated a merger with Central Asian Industrial Holdings. This eventually made the investors in both companies very wealthy, especially Isautier who had demanded no salary and was at first only paid in stock options. The rapid increase in the stock's value made Isautier by far the most generously compensated executive in Canada in 2004. In 2003 the company was renamed PetroKazakhstan to reflect that its entire operations are in that country.

In recent years PetroKazakhstan has seen considerable conflict with the government of Kazakhstan, including a fine for anti-competitive behaviour and protests of its environmental and labour record reportedly organized by government agents. In June 2005 PetroKazakhstan announced it had been approached for a possible takeover or merger, sending stock prices up significantly. The most frequently mentioned possible suitor was a branch of India's ONGC. The stock quickly fell back down when the government of Kazakhstan announced that it would demand the right to acquire PetroKazakhstan prior to any merger, in part because India would have to export their oil through Russia, thus increasing Kazakhstan’s dependence on Russia. In August 2005 China National Petroleum Corporation agreed to buy the company for US$4.18 billion. This made the PetroKazakhstan deal the largest overseas acquisition by a Chinese company. PetroKazakhstan had been delisted in Kazakhstan, Toronto, New York, London and Frankfurt Stock Exchanges.

ee also

* Shanghai Cooperation Organization - of which Kazkhastan and China are both members

External links

* [http://www.petrokazakhstan.com/ Official site]
* [http://www.nytimes.com/2005/08/23/business/worldbusiness/23oil.html China Ups the Ante in Its Bid for Oil]
*CNOOC Ltd. The Chinese state-owned oil company that failed to acquire Unocal.