Hurricane Hydrocarbons survives bizarre armed attack on Kazakhstan refinery
adding another chapter to dramatic year

By David PARKINSON

CALGARY (CP) - Hurricane Hydrocarbons Ltd. has survived a bizarre coup attempt at its refining operation in Kazakhstan, adding another chapter to a dramatic year at the oil producer.

Hurricane officials and the Interfax-Kazakhstan news agency reported that the company's 89 per cent owned Shymkentnefteorgsyntez (ShNOS) oil refinery in southern Kazakhstan was stormed last Wednesday by an armed force working on behalf of Nurlan Bizakov, former chairman of the refinery's management board. Bizakov left his position in August.

Bizakov and his mercenaries occupied the facility after a district court in the city of Asanta issued an order for ShNOS to reinstate the former executive. Hurricane is seeking a stay of the order, arguing that the position no longer exists and the court has no authority over the management decisions of the refinery.

According to the Calgary-based company and to Kazakhstan news reports, Bizakov's forces _ a for-hire military security team from a regional detachment of the Kuzet, a guard service of Kazakhstan's Internal Affairs Ministry _ occupied the refinery at gunpoint for more than a day.

Bizakov held a news conference to announce he had taken over as president of the operation and had opened a new bank account to collect receipts from oil product sales.

According to the reports, the situation was defused peacefully late Thursday when the national chief of the Kuzet ordered the regional detachment to leave the refinery.

``Mr. Bizakov then agreed to leave on his own,'' said Lucy Stratulate, Hurricane's spokeswoman in the former Soviet republic.

Marlo Thomas, the Canadian president of ShNOS who also runs Hurricane's oil-producing unit in Kazakhstan, returned to the refinery with a fortified security team of his own.

``Things are back to normal,'' Bernard Isautier, chairman, president and chief executive of Hurricane, said from London. He said the facility didn't suffer any physical or financial damage during Bizakov's brief takeover.

Bizakov and the company have been in court several times since Hurricane replaced Bizakov with Thomas. The company maintains that Bizakov resigned voluntarily, but Mr. Bizakov says he was pressured to quit. Both sides have numerous appeals pending, with the next court hearing scheduled for Dec. 5.

Hurricane bought a majority stake in the refinery in March, ending a long-running feud with Bizakov and the facility that had made it difficult and expensive for Hurricane to refine crude oil from its Kazakhstan fields and market the resulting products.

The purchase came as Hurricane, which was on the brink of bankruptcy last year, emerged >from court protection after a restructuring gave the company new life.

The improved refining access and strong prices for oil and gas this year have helped the company thrive since the restructuring, lifting its share price over $10 on the Toronto Stock Exchange as recently as a month ago, from a low of 27 cents in September 1999.

William Magee, an analyst with Creditfinance Securities Ltd. in Toronto, said the timing of Bizakov's action is unfortunate as Hurricane sets to embark on a road show in Europe to drum up investment. However, he didn't think the episode is indicative of any long-term problems with Hurricane doing business in Kazakhstan.

``In general, I think the government supports this company,'' Magee said. ``They're a pretty good corporate citizen.''

He said Kazakhstan's regulatory framework in the oil and gas sector is relatively solid compared with other former Soviet republics, and its government is pro-West.

``I think this is something that will blow over,'' he said.

Isautier said that even if the final court ruling in Bizakov's case goes against Hurricane, the company doesn't expect it will be forced to rehire the former executive. He said the company might have to pay compensation, but the amount wouldn't have any material impact on its finances.