JPMorgan - KASE
JPMorgan - KASE JPMorgan - KASE
We also expect to actively pursue access to other pipelines, including the pipeline constructed by the Caspian Pipeline Consortium, or CPC. Improve performance of the Shymkent refinery. We have undertaken, together with a consultant, a review of the refinery’s operations to identify areas of improvement. We have been implementing relatively low-cost projects designed to increase product quality and production yields at the Shymkent refinery and to improve the refinery’s product mix, such as: Š upgrading the refinery’s secondary process capacity in order to reduce the output of lower margin products, such as fuel oil, and increase the output of higher margin products, such as gasoline and jet fuel; Š refurbishing and recommissioning a vacuum gas oil distillation unit to reduce production of lower margin products; Š installing additional equipment to enhance product quality; and Š implementing new processes to increase energy efficiencies in order to reduce our refining costs. Reduce overhead and operating costs. We have eliminated the remaining overlap between the operations of our principal operating subsidiaries, HKM and HOP, by establishing our joint marketing team. In addition, in accordance with established western management practices, we intend to outsource many service activities that we currently perform to support our Upstream and Downstream operations and to divest non-core businesses and assets. Selectively seek acquisition opportunities. We believe our integrated operations and leading position as a producer in the South Turgai Basin will create opportunities for additional growth through selective acquisitions. As part of our strategy to increase our reserves and production, we will pursue opportunities to acquire additional reserves from third parties. To date, our acquisition strategy has focused on acreage and assets, both producing and of exploration potential, within the vicinity of our current oil fields. We intend to pursue selective acquisitions throughout Kazakhstan. Effectively exploit our natural gas reserves. We have implemented a gas utilization program designed to reduce the flaring of gas produced from our fields and the consequential release of pollutants into the environment, and to help us meet our power needs. We expect this program to provide us with a more reliable and lower cost power source for our field operations, power for the Shymkent refinery through swaps, and the opportunity to sell power to third parties. Recent Developments New Term Facility. On January 2, 2003, HKM entered into a $225 million export financing agreement with a consortium of European banks, comprising Natexis Banques Populaires, BNP Paribas and ING Bank. This loan facility, or the Term Facility, has a maturity of four years and is repayable in installments. In December 2002, HKM repaid all amounts outstanding under a preexisting export financing facility, which was replaced by the Term Facility. As of February 7, 2003, HKM had drawn $190 million under this facility. HKM will have the option to draw down an additional $35 million, subject to approval and the ability of the bank consortium to fully syndicate the Term Facility. Operations. On January 7, 2003, in connection with the announcement of our new Term Facility, we reported that: Š our 2002 production averaged 135,842 BOPD, and production for the three months ended December 31, 2002 averaged 158,500 BOPD. Part of the increased production will be recognised as sales in the first quarter of 2003, due to the normal seasonal build up of inventories at year-end and the timing of revenue recognition associated with increased non-FCA sales; 4
Š our QAM pipeline construction project is on schedule for commissioning at the end of the second quarter of 2003. As of December 31, 2002, approximately $42 million had been spent on the project, the entire 177 km right of way had been cleared, over 165 km of pipe had been strung (of which 70% had been welded) and 25% of the trenching had been completed. The Kumkol pump station was over 40% complete and the Dzhusaly railway terminal was over 50% complete as of December 31, 2002; Š as of December 31, 2002, the 55-megawatt gas-fired electrical power plant to be used in connection with our gas utilization program at Kumkol was more than 70% complete and was on target for commissioning in the second quarter of 2003 and as of December 31, 2002, $28 million had been spent on this project; and Š agreements were also concluded late in 2002 for Turgai Petroleum (our 50% joint venture with Lukoil) to participate in both the QAM pipeline construction project and the gas utilization project. Capital Budget. In our January 7 announcement, we also reported that our board of directors had approved a 2003 capital budget of $167 million, allocated as follows ($ in millions): Upstreamincludingjointventures ..... $135.2 Downstream........................ $ 17.6 MarketingandTrading .............. $ 8.1 CorporateServices................... $ 6.1 The Issuer Hurricane Finance B.V., or the issuer, is a special purpose entity organized under the laws of the Netherlands. The issuer is a wholly owned subsidiary of HKM. 5
- Page 1 and 2: Offering Circular Hurricane Finance
- Page 3 and 4: Moscow RUSSIA SAMARA Ufa OMSK RUSSI
- Page 5 and 6: Š Š you have made certain acknowl
- Page 7 and 8: Unless otherwise indicated, all ref
- Page 9 and 10: Notice to New Hampshire Residents N
- Page 11 and 12: Offering Memorandum Summary This su
- Page 13: have a network of sales, storage an
- Page 17 and 18: a senior intercompany loan to HKM.
- Page 19 and 20: Organizational Structure The follow
- Page 21 and 22: Nine Months Ended Year Ended Decemb
- Page 23 and 24: Year Ended December 31, 2001 Nine M
- Page 25 and 26: construction of the plant, anticipa
- Page 27 and 28: Inadequate infrastructure could adv
- Page 29 and 30: fully prohibit us from doing so. In
- Page 31 and 32: Kazakhstan’s foreign investment,
- Page 33 and 34: subsoil user and the Kazakhstani go
- Page 35 and 36: In general, estimates of economical
- Page 37 and 38: thereon and any other amounts owed
- Page 39 and 40: Selected Historical Consolidated Fi
- Page 41 and 42: Management’s Discussion and Analy
- Page 43 and 44: (11,642 tonnes per day) in Septembe
- Page 45 and 46: Adoption of Certain Accounting Stan
- Page 47 and 48: The following table sets out the so
- Page 49 and 50: The total royalty and tax expense f
- Page 51 and 52: perform a quarterly ceiling test. T
- Page 53 and 54: The increase in FCA differentials p
- Page 55 and 56: In addition, we incurred production
- Page 57 and 58: plan. The CCAA plan was implemented
- Page 59 and 60: Royalties Royalties increased from
- Page 61 and 62: Cash is managed centrally through t
- Page 63 and 64: Š completion of the gas utilizatio
Š our QAM pipeline construction project is on schedule for commissioning at the end of the<br />
second quarter of 2003. As of December 31, 2002, approximately $42 million had been<br />
spent on the project, the entire 177 km right of way had been cleared, over 165 km of pipe<br />
had been strung (of which 70% had been welded) and 25% of the trenching had been<br />
completed. The Kumkol pump station was over 40% complete and the Dzhusaly railway<br />
terminal was over 50% complete as of December 31, 2002;<br />
Š as of December 31, 2002, the 55-megawatt gas-fired electrical power plant to be used in<br />
connection with our gas utilization program at Kumkol was more than 70% complete and<br />
was on target for commissioning in the second quarter of 2003 and as of December 31,<br />
2002, $28 million had been spent on this project; and<br />
Š agreements were also concluded late in 2002 for Turgai Petroleum (our 50% joint venture<br />
with Lukoil) to participate in both the QAM pipeline construction project and the gas<br />
utilization project.<br />
Capital Budget. In our January 7 announcement, we also reported that our board of directors<br />
had approved a 2003 capital budget of $167 million, allocated as follows ($ in millions):<br />
Upstreamincludingjointventures ..... $135.2<br />
Downstream........................ $ 17.6<br />
MarketingandTrading .............. $ 8.1<br />
CorporateServices................... $ 6.1<br />
The Issuer<br />
Hurricane Finance B.V., or the issuer, is a special purpose entity organized under the laws of the<br />
Netherlands. The issuer is a wholly owned subsidiary of HKM.<br />
5
Change language