TO ALL:
I think this is today's WSJ article and the Article Faris is referring
to on AOL, if its not today's WSJ article, will someone please correct me:
:Subject: Dow Jones Wire Story
Date: Tue, Nov 18, 1997 04:32 EST
From: Bouhafa
Message-id: <19971118093201.EAA27458@ladder01.news.aol.com>
By Hugh Pope
Staff Reporter of The Wall Street Journal
KYZYLORDA, Kazakstan -- When Hurricane Hydrocarbons Ltd. moves to a full listing on the Nasdaq Stock Market in coming days or weeks, investors will get more than just a better chance to bet on the great Central Asian oil rush. They will be buying a share of a children's summer camp, a premier Kazakstan soccer team and 818 double-humped Bactrian camels.
Hurricane is one of a rare breed of Central Asian plays, and, with its unusual assets, a rarer breed of oil company. But the Calgary, Alberta, upstart is running with a pack of American, Chinese, Russian and multinational oil giants that are grappling with the geopolitics of huge oil fields, pipeline routes and the $40 billion of investments already committed to Kazakstan.
So far this year, Hurricane's stock price has more than tripled on the Toronto Stock Exchange on news of the strong production and reserves in the Kyzylorda area where it operates. Kyzylorda is a remote desert region of Kazakstan, a country that is nearly one-third the size of the U.S. and may have half of Central Asia's estimated 100 billion to 200 billion barrels of oil.
But out here in the "Wild East," stock prices need have nothing to do with track records. An even more speculative Kazakstani play is American International Petroleum Corp. of New York. The company's stock price surged more than fivefold in the past 52 weeks amid talk of license signings, doubled reserves, close links to Kazakstan's president and production deals with oil-industry majors before dropping back.
"It is a volatile performance, it's a company in an area where people in America don't have a clear idea what's going on . . . [and] it's made a lot of people rich," says Gary Shultheis, a publicist for American International.
Wealth without wells isn't the only Central Asian oil excitement on offer. Vitol SA, a closely held European oil trader, backed out of a Kazakstani refinery privatization when demands for back taxes got mired in local politics. Former Vitol executive Gavin de Salis, a 40-year-old Briton, spent eight days in Kazakstani jail in August and now faces charges, which he disputes, that Vitol was evading taxes.
"It was a shock. But I can't say anyone has treated me badly except those whose job it is to do so," says Mr. de Salis, now out on bail. He is working from a hotel room to get back to the refinery he still heads and is taking out $1,000 ads to tell his side of the story in the generally hostile Kazakstani news media. Because of the court action charging him with "sordid intent" and of being a "criminal mastermind," he won't name the Kazak and
international investors behind him.
Because of nepotism and corruption in Central Asia, investors and even honest local officials have trouble distinguishing among entrepreneurs raising cash to get in, those cashing in to get out and those who have no cash at all. Brokers predict a slew of oil-exploration licenses will be canceled in Kazakstan as small companies fail to meet work targets and newly confident majors move in.
"If you look at a map, you'll see tens of contracts that have been awarded, but the number of things actually happening is a fraction of that," says John H. Works, a Central Asia specialist and a senior vice president at ABN Amro Bank NV of the Netherlands. "There are some companies whose sole reason for being was their development plan with which to try to find other investors. The verdict is still out on how many will pull it off."
(END) DOW JONES NEWS 11-18-97
00:18 AM
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