The oil trading company CCL Oil Ltd. said on July 20 that it had lodged a formal complaint with Kazakhstan’s Supreme Court. The issue: the Kazakhstani government’s treatment of the concession CCL Oil won last year to manage the Pavlodar oil refinery. The company disputes the government’s May 19 decision to transfer 88 percent of the refinery’s shares to Kazakhstan’s national oil company, Kazakhoil. (Reuters, July 20; Delovaya nedelya [Almaty], July 24)
CCL Oil claims to be a U.S. company, though it is reportedly run by a group of local Koreans. In March 1997, the company won a five-year concession to manage the Pavlodar refinery but the terms of the concession remain unclear. The local press offers two different versions: one contends that CCL Oil became the refinery’s majority shareholder for the five years (though without the right to sell), the other says that CCL Oil simply gained vague management rights.
Which of these versions is true obviously has a bearing on the present dispute. CCL Oil claims that it had ownership rights to the disputed 88 percent stake and was not consulted on the transfer. The company claims the transfer has no legal basis: It told journalists on July 20 that the company had invested over US$50 million in the concession, cut its debts and boosted operations. It expressed concern that, as a joint-stock company, Kazakhoil has limited capital and might be unable to cover CCL Oil’s losses if the concession was breached.
The row over the Pavlodar refinery mirrors similar battles for control of key Kazakhstani enterprises, including rifts with Belgium’s Tractebel, Canada’s World Wide Minerals, Switzerland’s Vitol and the metal trading firm Trans-World Group. There are nonetheless signs that Kazakhoil will sign a fresh agreement with CCL Oil, albeit on new terms. (Focus Central Asia [Almaty], July 15) Meanwhile, foreign investors are watching Kazakhoil attentively. As well as receiving the majority stake in the Pavlodar refinery, Kazakhoil has been handed 20 and 25 percent stakes in oil producers Aktobemunaigaz and Mangistaumunaigaz respectively. It is hoped that Kazakhoil’s growing portfolio will aid the fledgling state oil company to raise finance on the capital markets. (Reuters, July 20)–SC
OFFICIAL CORRUPTION IN KAZAKHSTAN DETAILED.