Consortium to cede stake in Kazakh gas field

Posted on June 17, 2011. Filed under: Fossil fuels |

ASTANA, June 16: A global consortium that includes ENI and Chevron has agreed to give up a part of its holding in a Kazakh gas field at a discount after being accused of legal violations, a report said on Thursday.

The report comes amid continuing efforts by the resource-rich republic’s government to win back stakes in energy companies it sold to Western giants in the 1990s when oil prices were low.

The Interfax news agency said the Karachaganak Petroleum Operating Group (KPO) was ready to give up a five per cent stake in the Karachaganak gas field for free, along with another five per cent stake at “market prices.” The operating consortium includes Italy’s ENI and Britain’s BG Group, which each holds 32.5 per cent stakes, along with the US firm Chevron and Russia’s private producer Lukoil, which holds 20 per cent and 15 per cent.

The report, which was based on an unnamed source close to the Kazakh oil and gas ministry, said the government would in return drop all charges against the group except for those related to taxes.

Kazakhstan accuses KPO of violating immigration laws and tax evasion.

Company officials issued no immediate comment to the report.

The Central Asian country has grown more assertive over its natural resources, pushing to revise agreements signed in the years immediately following the fall of the Soviet Union in 1991.

Prime Minister Karim Massimov in 2008 said the government could seize both energy fields and mineral deposits “if contractual obligations … are not respected.” Diplomats and investors have privately said that such moves could scare off foreign investment, complicating the government’s efforts to finance new projects.—AFP

Dawn.com

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