PetroKazakhstan

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PetroKazakhstan was a Canadian oil company, based in Calgary, that had much of its business focused on Kazakhstan where it had some 550 million barrels (87,000,000 m³) of oil and 25 billion cubic feet (710,000,000 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 165,000 barrels (26,200 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. Some people say that the price was suspiciously low, suggesting that the company must have paid bribes to the state. The company, however, maintains that the price was fair given that the field's productivity was poor and Kazakhstan was wracked by financial crisis.

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.

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