U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
[_] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004 Commission File No. 001-31448
PETROKAZAKHSTAN INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PROVINCE OF ALBERTA, CANADA 1311 NOT APPLICABLE
(PROVINCE OR OTHER JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) INDUSTRIAL IDENTIFICATION
CLASSIFICATION CODE NUMBER)
NUMBER)
SUITE 1460, SUN LIFE PLAZA, NORTH TOWER
140-4TH AVENUE S.W.
CALGARY, ALBERTA, CANADA T2P 3N3
(403) 221-8435
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CT CORPORATION SYSTEM, 111-8TH AVENUE, NEW YORK, NEW YORK
10011, (212) 894-8940 (NAME, ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE
NUMBER (INCLUDING AREA CODE) OF AGENT FOR SERVICE OF THE
REGISTRANT IN THE UNITED STATES)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
CLASS A COMMON SHARES, NO PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered or to be registered pursuant to Section 12(g) of the Act:
NONE
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: NONE
For annual reports, indicate by check mark the information filed with this form:
[X] Annual information form [X] Audited annual financial statements
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.
AT DECEMBER 31, 2004, 76,223,130 CLASS A COMMON SHARES OF PETROKAZAKHSTAN INC.
WERE ISSUED AND OUTSTANDING. AT DECEMBER 31, 2004, NO CLASS OF PREFERRED SHARES
OF PETROKAZAKHSTAN INC. WERE ISSUED AND OUTSTANDING.
Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the file number assigned to
the Registrant in connection with such Rule. YES [_] NO [X]
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES [X] NO [_]
PRIOR FILINGS MODIFIED AND SUPERSEDED
The Registrant's Annual Report on Form 40-F for the year ended December 31,
2004, at the time of filing with the Securities and Exchange Commission (the
"Commission"), modifies and supersedes all prior documents filed pursuant to
Sections 13, 14 and 15(d) of the Exchange Act for purposes of any offers or
sales of any securities after the date of such filing pursuant to any
Registration Statement under the Securities Act of 1933 of the Registrant which
incorporates by reference such Annual Report.
PRINCIPAL DOCUMENTS
The following documents have been filed as part of this Annual Report on Form
40-F:
A. ANNUAL INFORMATION FORM
For the Annual Information Form of PetroKazakhstan Inc. ("PetroKazakhstan" or
the "Company") for the year ended December 31, 2004, see Exhibit 1 of this
annual report on Form 40-F.
B. AUDITED ANNUAL FINANCIAL STATEMENTS
For PetroKazakhstan's consolidated audited financial statements, including the
report of the independent registered public accounting firm with respect
thereto, see pages FS1 through FS36 of the Company's 2004 Annual Report, which
pages are attached hereto and included herein as Exhibit 3. For a reconciliation
of PetroKazakhstan's results and financial position from Canadian to United
States generally accepted accounting principles, see Note 21-Reconciliation of
Results from Canadian GAAP to U.S. GAAP on pages FS32 through FS36 of such 2004
Annual Report.
C. MANAGEMENT'S DISCUSSION AND ANALYSIS
For management's discussion and analysis, see pages 33 through 66 of the
Company's 2004 Annual Report, which pages are attached hereto and included
herein as Exhibit 2.
CONTROLS AND PROCEDURES
PetroKazakhstan maintains disclosure controls and procedures and internal
control over financial reporting designed to ensure that information required to
be disclosed in the reports filed under the Exchange Act, as amended, is
recorded, processed, summarized and reported within the time periods specified
in the Commission's rules and forms. PetroKazakhstan's Chief Executive Officer
and Chief Financial Officer, after evaluating the effectiveness of
PetroKazakhstan's disclosure controls and procedures (as defined in Exchange Act
Rule 13a-15(e)) as of the end of the period covered by this Form 40-F, concluded
that as of such date PetroKazakhstan's disclosure controls and procedures were
effective for the purpose for which they were designed.
During the fiscal year ended December 31, 2004, there were no changes in
PetroKazakhstan's internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, PetroKazakhstan's
internal control over financial reporting.
AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Company has determined that Jacques Lefevre is an
"audit committee financial expert" (as defined in paragraph 8(b) of General
Instruction B to Form 40-F). Mr Lefevre is "independent", as that term is
defined in the listing standards of the New York Stock Exchange and Rule 10A-3
of the Securities Exchange Act of 1934.
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CODE OF ETHICS
The Company has adopted a code of ethics (as that term is defined in Form 40-F)
that applies to its directors and employees (including its principal executive
officer, principal financial officer and controller). The Company will provide
any person, upon request to the General Counsel and Corporate Secretary of the
Company, with a copy of the code of ethics free of charge. To date, no amendment
has been made to the code of ethics, nor there has been any waiver, including
implicit waiver, granted from the code of ethics required to be disclosed in
this annual report on Form 40-F.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
For the years ended December 31, 2004 and 2003, professional services were
performed by Deloitte & Touche LLP, the member firms of Deloitte Touche
Tohmatsu, and their respective affiliates, including TOO Deloitte & Touche that
has served as the principal accountant for the audit of the Company's annual
financial statements (collectively, "Deloitte & Touche").
AUDIT FEES: The aggregate audit fees billed by Deloitte & Touche were $394,011
in the year ended December 31, 2004 and $646,951 in the year ended December 31,
2003. These fees include amounts for services relating to the listing of the
Company on the London Stock Exchange and issuance of comfort letters.
AUDIT-RELATED FEES: The aggregate audit related fees billed by Deloitte & Touche
were nil in the year ended December 31, 2004 and $6,041 in the year ended
December 31, 2003.
TAX FEES: The aggregate fees billed by Deloitte & Touche for professional
services rendered for tax advice were $10,175 in the fiscal year ended December
31, 2004 and $40,671 in the fiscal year ended December 31, 2003.
ALL OTHER FEES: The Company did not incur any fees billed by Deloitte & Touche
for services other than the services reported under the captions "Audit Fees",
"Audit-Related Fees" and "Tax Fees" above for the years ended December 31, 2004
and 2003.
AUDIT COMMITTEE PRE-APPROVAL:
Under the terms of its mandate, the Audit Committee pre-approves every
engagement by the Company of its accountants to render audit and non-audit
services, and therefore no pre-approval policies and procedures have been
established for purposes of paragraph (c)(7)(i)(B) of Rule 2-01 of Regulation
S-X. In 2004, the Company's accountants did not render any audit-related and
non-audit services to the Company. Consequently, the DE MINIMIS exception set
out in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X was not applicable
to the Company during 2004.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements required to be disclosed in
this annual report on Form 40-F.
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CONTRACTUAL OBLIGATIONS
Summary of Contractual Obligations
(In millions of dollars) Total commitments by period
Total Within 1 1-3 years 4-5 years After 5
Commitments year years
Long-term debt(1) 134.9 15.5 3.7 1.9 113.8
Estimated interest payments(2) 92.8 17.9 36.9 37.6 0.4
Operating leases(3) 104.0 43.0 59.8 1.2 -
Capital leases(3) - - - - -
Future site restoration costs(4) 32.5 - - - 32.5
Work commitments(5) 6.1 3.5 2.6 - -
Purchase obligations(6) 12.2 12.2 - - -
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TOTAL CONTRACTUAL OBLIGATIONS 382.5 92.1 103.0 40.7 146.7
===============================================================================
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(1) See Note 11 in the Company's consolidated financial statements for the year
ended December 31, 2004.
(2) Estimated interest payments related to the Company's outstanding debt
balances as at December 31, 2004.
(3) Operating leases are mainly for rail cars that the Company uses to
transport crude oil, refined oil products and certain equipments used in
upstream operations. Although the Company is committed to lease rail cars,
the terms of the contracts allow termination with a 30 day notice. The
Company has no capital leases.
(4) The Company has an obligation of $32.5 million for future site restoration
costs as at December 31, 2004 which represents the estimated future cash
outflows discounted at 8.5%. The total undiscounted estimated cash flows
required to settle the obligations are $77.4 million with the expenditures
being incurred over ten years commencing in 2014.
(5) Work commitments are non-discretionary expenditures for seismic and
drilling that the Company is contractually committed to under the terms of
its hydrocarbons licenses.
(6) Purchase obligations represent contractual obligations for goods and
services for which the services have yet to be provided or for which the
Company has not yet taken title to the goods. All other purchase
commitments are discretionary.
SALES COMMITMENTS
The Company has sales commitments under contracts with two customers to supply
an agreed volume of crude oil within the first four months of 2005. The
estimated value of these commitments is approximately $43.1 million.
AUDIT COMMITTEE
The Company has a separately designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is
comprised of James B.C. Doak, Jacques Lefevre and Jan Bonde-Nielsen. Jacques
Lefevre chairs the Audit Committee.
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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
A. UNDERTAKING
The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.
B. CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed a Form F-X in connection with the class of
securities in relation to which the obligation to file this report arises.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that
it meets all of the requirements for filing on Form 40-F and has duly caused
this Annual Report on Form 40-F to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Calgary, Province of Alberta, Canada.
PETROKAZAKHSTAN INC.
(Registrant)
By: /s/ Anthony R. Peart
------------------------------
Name: Anthony R. Peart
Title: Senior Vice President
General Counsel and
Secretary
Date: March 30, 2005
DOCUMENTS FILED AS PART OF THIS REPORT
1. Annual Information Form of the Registrant for the year ended December
31, 2004.
2. Management's Discussion and Analysis of the Registrant for the year
ended December 31, 2004.
3. Audited Consolidated Financial Statements of the Registrant as of
December 31, 2004 and for each of the three years then ended (NOTE 21
TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE REGISTRANT
RELATES TO DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES).
EXHIBITS
23.1 Consent of TOO Deloitte & Touche, independent registered public
accounting firm.
23.2 Consent of McDaniel & Associates Consultants Ltd.
31.1 Certification of President and Chief Executive Officer pursuant to Rule
13a-14(a) or 15d-14 of the Securities Exchange Act of 1934.
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or
15d-14 of the Securities Exchange Act of 1934.
32.1 Certificate Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2003.
32.2 Certificate Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2003.