Kazakhstan reassures investors over Karachaganak clash

размер шрифта: Aa | Aa
07.10.2010 22:04

11_1_m.jpgPETROLEUM  ECONOMIST. Kazakhstanis not trying to force the Karachaganak partners to cede a stake in the project to state-owned PETROLEUM  ECONOMIST. KazMunaiGaz, oil minister Sauat Mynbayev tells Petroleum Economist. He talks to NJ Watson on the sidelines of the KAZENERGY Eurasian Forum in Astana.

Negotiations with the Karachaganak partners are still taking place, says Mynbayev, adding that he is "convinced" the parties have reached an agreement. "We're not talking about buying a stake," he insists, "The parties are discussing how to improve the project." The government has been stung by criticism of its strategy to reassert control over Kazakhstan's energy sector. But now officials are trying to allay investors' fears. Prime Minister Karim Massimov told the Astana conference that the country's policy was to reduce the "uncertainty gap" for foreign investors. Other ministers echoed his comments. During the summer, statements from KazMunaiGaz and the foreign partners in the project suggested that the national oil company is seeking a 10% stake in Karachaganak Petroleum Operating (KPO) – the country's second-biggest producer, at 382,000 barrels of oil equivalent a day (boe/d) in 2009, and the only one without state involvement. Mynbayev concedes that talks between the government and KPO have increased investor uncertainty. But, he says: "We are trying to resolve all issues in a reasonable way." Over the past two years, however, KPO – which groups Eni (32.5%), BG Group (32.5%), Chevron (20%) and Russia's Lukoil (15%) – has been pursued by the authorities with accusations of tax evasion and violations of environmental, employment and immigration laws. There have also been disputes over the pace and cost of Karachaganak's development. Andrey Kirillov, head of Lukoil's Kazakhstan operations, refused to be drawn on the negotiations. But he says the consortium could reduce the cost of the project's third-stage expansion to as low as $10bn, from a projection that had soared to $14.5bn. In 2007, KPO estimated the third phase, lifting output to over 0.6m boe/d, would be on stream in 2012, at a cost of $8bn.

PETROLEUM  ECONOMIST

Nick Watson

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