PetroKazakhstan
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PetroKazakhstan is a Canadian oil company, based in
Calgary Calgary ( ) is the largest city in the western Canadian province of Alberta and the largest metro area of the three Prairie Provinces. As of 2021, the city proper had a population of 1,306,784 and a metropolitan population of 1,481,806, makin ...
, Alberta, that has all of its business focused on
Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
where it had some of oil and of
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
reserves (January 2005 estimate) in the
Turgai Turgai may refer to: * Turgay Oblast (Russian Empire), an administrative unit of the Russian Empire * Torgay Region, a former administrative unit in Kazakhstan * Turgay (river), a river-valley system in Kazakhstan * Turgai Sea The Turgai Sea, also ...
basin region. These are the second largest Kazakhstani proven reserves after
ChevronTexaco Chevron Corporation is an American multinational energy corporation. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened to Socal or CalSo), it is headquartered in Sa ...
's
TengizChevroil Tengizchevroil is a joint venture between Chevron (50% share in the consortium), ExxonMobil (25% share), KazMunayGas (20% share) and LukArco (5% share). The joint venture was formed in April 1993, when the government of Kazakhstan granted exclusiv ...
. Estimated production is of
oil An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
per day. In 2005, PetroKazakhstan was acquired by
China National Petroleum Corporation The China National Petroleum Corporation (CNPC) () is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing. CNPC was ranked fourth ...
and then in 2006 transferred to
PetroChina PetroChina Company Limited () is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. The company is currently Asia's largest oil and gas pr ...
.


Origins - Hurricane

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 and gas finds in Southern Kazakhstan, in 1991 becoming a partner in a JV to develop the Kyzylkiya, Aryskum, Maibulak and South Kumkol fields. 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 A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value. Types of refineries Different types of refineries ar ...
owned by Central Asian Industrial Holdings N.V. (CAIH), a Dutch-registered offshore affiliate of
Kazkommertsbank Kazkommertsbank ( kk, Қазкоммерцбанк, ''Qazkommertsbank'') was the largest private bank in Kazakhstan with a total market share of 24%. Kazkommertsbank merged with Halyk Bank on 27 July 2018. About Kazkommertsbank is a large provi ...
(KKB) Kazakhstan's leading banking group, which used their monopoly to charge high prices. At the same time oil prices plunged. In 1999 the company was forced into
receivership In law, receivership is a situation in which an institution or enterprise is held by a receiver—a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights"—especially in ca ...
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 N.V. From mid-October 1999 to 2000 Hurricane acquired 88.4% of OJSC Shymkentnefteorgsintez (now PetroKazakhstan Oil Products LLP) which owns the 160,000 bpd Shymkent Oil Refinery, the most modern of the country's three refineries (commissioned 1985). In doing so Isautier put 30% of Hurricane's stock in CAIH's hands. 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 option In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified dat ...
s. The rapid increase in the stock's value made Isautier by far the most generously compensated executive in Canada in 2004.


Renamed PetroKazakhstan

In 2003 Hurricane was renamed PetroKazakhstan to reflect that its entire operations are in that country. In the following years Hurricane/PetroKazakhstan saw 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 that 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 Oil and Natural Gas Corporation (ONGC) is a central public sector undertaking under the ownership of Ministry of Petroleum and Natural Gas, Government of India. It is headquartered in New Delhi. ONGC was founded on 14 August 1956 by the ...
. 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 India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
would have to export their oil through
Russia Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
, thus increasing Kazakhstan’s dependence on Russia.


CNPC and PetroChina

On 21 August 2005
China National Petroleum Corporation The China National Petroleum Corporation (CNPC) () is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing. CNPC was ranked fourth ...
(CNPC), agreed to buy the company for US$4.18 billion via CNPC International Ltd. (CNPCI), a 100% subsidiary of China National Oil & Gas Exploration and Development Corp. (CNODC). This made the PetroKazakhstan deal the largest overseas acquisition by a Chinese company. PetroKazakhstan was delisted in Kazakhstan, Toronto, New York, London and Frankfurt Stock Exchanges. As part of the deal with CNPC, on 15 October 2005, according to the ''Law of the Republic of Kazakhstan On Subsoil Use'', CNPC agreed to sell back 33% of the shares of PetroKazakhstan Inc. to KazMunaiGas (KMG), a transaction which was completed on 5 July 2006. Further on 6 July 2007 KMG bought back a 50% share in PetroKazakhstan subsidiary PetroKazakhstan Oil Products LLP [PKOP) thereby allowing the Kazakh government to regain an equal share of the nation's most modern oil refinery. In 2006 CNPC transferred its remaining 67% of shares to China Petroleum Engineering & Construction Company (CPECC), a 50/50 joint venture with its own listed subsidiary
PetroChina PetroChina Company Limited () is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. The company is currently Asia's largest oil and gas pr ...
, who currently manage and operate the company.PetroChina press release August 2006
/ref>


See also

*
Shanghai Cooperation Organisation The Shanghai Cooperation Organisation (SCO) is a Eurasian politics, political, economy, economic and security organization. It is the world's largest regional organization in terms of geography, geographic scope and world population, population, c ...
- of which Kazakhstan and China are both members


References


External links


PetroKazazhstan company site
{{DEFAULTSORT:Petrokazakhstan Defunct oil companies Oil companies of Canada Oil and gas companies of Kazakhstan Companies based in Calgary Energy companies established in 1981 Non-renewable resource companies established in 1981 Non-renewable resource companies disestablished in 2006 1981 establishments in the Kazakh Soviet Socialist Republic 2000s disestablishments in Kazakhstan Defunct companies of Alberta Defunct energy companies of Kazakhstan Companies formerly listed on the London Stock Exchange Canadian companies disestablished in 2006 Canadian companies established in 1981 Defunct energy companies of Canada