S&P: PetroKazakhstan unaffected

Standard & Poor's said that the news of a recent court ruling and regulatory charges will not affect its rating and outlook on Kazakhstan-based integrated oil company PetroKazakhstan Inc. (B+/positive/--).

The ratings remain unchanged, as the freeze of the company's 50% stake in Turgai Petroleum by a Kazakhstan court and various regulatory charges so far have had a limited impact on the company's operations and financials.

Turgai is a 50:50 joint venture between PetroKazakhstan and LUKoil OAO (BB/stable/--), responsible for 24% of PetroKazakhstan's 2004 production. S&P said it believes that the conflict over Turgai and various charges reflect the risk of doing business in Kazakhstan, where tax, regulatory, and corporate governance environments are developing. Country risk is already factored in to the rating on PetroKazakhstan.

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