American International Petroleum in Talks on Kazakh Financing|
New York, Sept. 8 (Bloomberg) -- American International
Petroleum Corp. said it's in discussions with several companies
interested in either buying a stake in the oil and natural gas
exploration company or helping it to finance the development of
oil and natural gas reserves in Kazakhstan.
New York-based American International, which had 1998
revenue of $11.8 million, declined to name any of the companies.
The discussions have been going on for several months, American
Shares of American International have fallen 27 percent this
year amid concerns about the company's financial stability and
the problems it's having in finding a partner to develop its
fields in Kazahkstan, which is its major asset.
``All they need is money,' said Fadel Gheit, an oil
industry analyst with Fahnestock & Co., who doesn't have an
official rating on American International Petroleum.
The company estimates its Kazakh properties could hold as
much as 1.1 trillion cubic feet of recoverable gas and 2 billion
barrels of oil. A March 30 report by an independent auditor said,
however, that American International will have to spend ``a
substantial amount' to capitalize on its properties.
``These matters raise a substantial doubt about the
company's ability to continue as a going concern,' said the
report from the Houston auditing firm ,Hein & Associates. The
audit was published in an SEC filing by American International
American International has lost money since 1992 and could
see its license to drill in Kazakhstan revoked for not doing
enough work on the fields it plans to explore there. The company
recently got financing that will let it keep its licenses and
plans to drill four wells there this year, said Michael Dodge, a
spokesman for American International.
American International has been trying since 1997 to explore
for oil in Central Asia, where experts say some of the largest
reserves in the world may be waiting to be tapped.
Chevron Corp., the No. 4 U.S. oil company, has said it plans
to invest up to $20 billion to develop its Tengiz field in
Kazakhstan, which is located near the property owned by American
International. A group lead by Chevron is constructing a $2.3
billion pipeline to bring Kazakh oil to world markets.
American International hasn't produced any oil since 1997,
when it sold its oil and gas production subsidiaries in Latin
America to finance its expansion in Kazakhstan.
The company's shares rose 50 percent in July of 1997, after
the Kazakh government approved the transfer of an exploration
license to American International's joint venture with MED
Shipping & Trading, a Liberian company.
Shares of American International fell 1/16 to 3/4 in early