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Gold/Mining/Energy : Petrokazakhstan Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Ron Schier who wrote (1187)	8/14/2000 7:37:34 PM
From: VisionsOfSugarplums	Respond to of 2357

Ron, the limitation of oil exports was noted on Reuters. russiatoday.com Oil Firms Told to Supply Domestic Kazakh Refineries ALMATY, Aug 4, 2000 -- (Reuters) Kazakhstan has ordered that 13 oil companies divert some of their crude output to domestic refineries in August to ease an oil product shortage, a government order published in the official press on Friday said. A total of 688,000 tons of crude, around a quarter of Kazakhstan's monthly output, must be supplied to the country's three refineries in Pavlodar in the north, Atyrau in the west and Chimkent in the south, the order said. The refineries have been short of crude and working well below nameplate capacity as producers seeking to take advantage of high world prices have exported as much crude as possible. State oil company Kazakhoil and Hurricane Kumkol Munai, run by Canada's Hurricane Hydrocarbons Ltd, have been ordered to supply 150,000 tons each to the domestic market this month, to the Atyrau and Chimkent refineries respectively. Hurricane owns 88 percent of the Chimkent refinery. The order is likely to upset some companies on the list. Kazakhstan introduced an export quota at the start of the year to maintain supplies to the domestic market, but it was lifted when Western investors complained bitterly. "We are talking about an incredibly serious matter which the government aims to resolve in a no less serious manner, adopting decisive, important measures," said First Deputy Prime Minister Alexander Pavlov. In remarks broadcast by the state Khabar news program, he said that supplies to the three refineries had dropped to 347,000 tons in June from 469,000 tons in May. The government is particularly concerned at the shortage of oil products at a time when the annual grain harvesting campaign gets into full swing. Farmers have been complaining that fields of wheat have been left to rot due to the lack of fuel (C)2000 Copyright Reuters Limited. All rights reserved. Republication Another recent report I've seen is where Kazakhoil, the national oil production company, forbade a German/Kazakhstani venture from exporting oil. This article is interesting russiatoday.com Isautier made comments today in the conference call that the political risk is much lower in Kazakhstan, per petrol consultants, than many other developing nations but that there is "some problems of implementation" of the President's vision, encmpassing a "sincere commitment to free market economics and principles". This may or may not be the case, however I think that Hurricane's risk is magnified because all of their revenues are derived from one country and they are not a big player. Isautier confirmed that they would not be diversifying in the near future but would look at it longer term. Other: they have to re-apply (full process) to Nasdaq, they are delaying applying to London because of the "onerous" requirement to have historical audited f/s for ShNOS, and they are listing on Kazakhstan. There weren't as many analysts on this call as last, perhaps because they recently presented to, I think, over 200 institutions (?). Regards, t.

To: Ron Schier who wrote (1187)	8/14/2000 8:13:18 PM
From: Hickory	Read Replies (2) \| Respond to of 2357

Ron, I respect your caution, especially after having been so badly burned in 1998 and 1999. Yes, I grant you that this is a risky stock. In the Conference Call, Isautier referred obliquely to the problem that you highlight, when he talked about those in Kazakhstan who do not share the President's vision of the kind of robust economic climate he wants in Kazakhstan. There also is the reported problem of the Antimonopoly Commission taking ShNOS to court over raising domestic petroleum product prices. Isautier said he hoped that in time reason would prevail and that others would come round to the President's way of seeing things. We all hope so too. Although the risk is there, Hurricane, IMO, is positioned to become a cash cow. It already is demonstrating powerful earning capability--real bottom-line earnings (after taxes and everything else). And, as Isautier pointed out, finding costs are less than $1 /barrel, versus much more than that for virtually all other oil companies. Again, as he pointed out, further growth can be achieved with relatively little outlay of funds. He also pointed out that the opportunities in Kazakhstan are so great that THESE should be grasped ahead of what he considers lesser opportunities in other parts of the world. We could take all this with a grain of salt, saying that a good deal of it is just PR for his co. But Bernard has put his money where his mouth it. I don't think he would like to lose up to $20 MM of his own money. And who knows the situation from the inside better than he? When I see what outfits like Triton Energy are selling for, I don't think that eventually $20 or even $40 are unreasonable. Not next year, mind you, but 3 to 5 years from now. Hurricane has the capability to make you some very handsome profits. And for those kind of profits, it's worth waiting 3 - 5 years. Risks, yes, big risks, but if you wait until you have seen that the bad scenarios didn't come to pass, stockholders will be demanding prices commensurate with what this earnings machine will be worth when the negatives don't materialize. I'd hate to see a buddy miss out just 'cause you got burned. Many of the others of us did, too, but just used it as a buying op. We could be mistaken, but my gut feeling is that, despite the risks, we won't be. If you're ever going to get back in, don't wait until all the potential negatives are gone, or so will your opportunity. It's the potential negatives that keep the price of this stock at ridiculously low levels--that, and fear of getting burned again and a failure to understand the potential. Just MHO. Hickory