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05.10.2005 Re Turgai Petroleum

Re Turgai Petroleum  

In the course of arbitration under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, LUKOIL Overseas Kumkol B.V. makes claim to the shares of stock in Turgai Petroleum held by PetroKazakhstan, Inc. (PKI).
Turgai Petroleum, is a 50/50 joint venture between LUKOIL Overseas Kumkol B.V. and PKI. Turgai Petroleum holds the license to produce oil in the northern part of the Kumkol field in southwestern Kazakhstan. The deposit's southern part has been developed by PetroKazakhstan Kumkol Resources, a wholly owned subsidiary of PKI.
The preemptive right to shares of stock in Turgai Petroleum arises out of the Shareholders Agreement, which provides that in the event of any change of control of one shareholder, the other shareholder has the right to acquire shares of stock at an agreed price.
In view of a publicized transaction whereby PKI’s shares of stock are to be sold, LUKOIL Overseas Kumkol B.V. offered PKI to hold negotiations to discuss the acquisition of shares in Turgai Petroleum. However, PKI replied that it did not consider itself bound by the aforesaid provision of the Shareholders Agreement. Such a situation led LUKOIL Overseas Kumkol B.V. to assert its preemptive right in the arbitration underway at the current time under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.
LUKOIL Overseas intends to continue to protect its lawful interests as shareholder of Turgai Petroleum in the Kazakhstan and international courts.