JPMorgan - KASE

2001. For the first nine months of 2002, processing fees amounted to $2.1 million. The table
below sets out the total quantity of oil processed for third parties into refined products and the
average fee charged.
Tollers’ Volumes
Processed*
Processing
Fee
Processing
Fees Earned
(Tonnes) ($/tonne) ($000’s)
Nine months ended September 30, 2002 .............. 135,234 15.57 2,112
Nine months ended September 30, 2001 .............. 539,791 15.97 8,623
2001 ............................................. 694,924 15.84 11,008
2000 ............................................. 711,368 16.71 11,884
* 2001 processed crude is approximately 5.4 MMbbls (2000 – 5.5 MMbbls)
During the first nine months of 2002, processing at the Shymkent refinery was approximately
19.8 MMbbls or 72,400 BOPD, of which 1.0 MMbbls were custom-refined for third parties,
compared to 20.2 MMbbls or 73,900 BOPD, of which 4.1 MMbbls that were custom-refined for
third parties, in the first nine months of 2001.
The following table sets forth the Shymkent refinery’s on-site storage capacity.
Storage Tanks
Shell Capacity
(cubic meters)
Crudeatrefinery.......................................................... 180,000
Crudeatpipelineterminus ................................................. 40,000
Gasoline ................................................................. 181,000
Jetfuel: ................................................................. 30,000
Diesel ................................................................... 80,000
Fuel ..................................................................... 65,000
LPG ..................................................................... 1,800
Intermediate tankage ..................................................... 22,600
Total .................................................................... 600,400
We own two additional product storage depots in Taraz and one in Almaty. We also lease other
product storage facilities and operate a number of sales, storage and distribution outlets
throughout Kazakhstan. We own 135 railcars which were manufactured in 1993. Most product
and crude deliveries are made by rail in railcars provided by the state-owned railway or third
parties.
Crude oil production from our producing fields is and will continue to be the primary source of
crude oil for the Shymkent refinery. The Shymkent refinery has the potential to receive crude oil
from oilfields located in west Kazakhstan, which are connected to the refinery by railroad, the oil
fields located in north Kazakhstan, which are connected to the refinery by railroad, the oil and
natural gas fields in Uzbekistan, which are connected by railroad and the Russian oil fields, which
are connected to the refinery by pipeline.
In 2001, we engaged a consulting firm to review the Shymkent refinery’s operations in order to:
‰ improve the operations of the Shymkent refinery (including energy usage, losses, yields
and procedures); and
‰ enable us to determine the most appropriate investment strategy to prepare the refinery
for potential changes in product specification and to meet changes in the product market
demand.
We are implementing various of the recommendations.
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