Kazakhstan Nearly Doubles Oil Export Duty to $203.8/Ton

[Dover]

The Kazakh government will nearly double the export duty on crude oil to $203.8 per metric ton from $109.91 in October, a government decree published Thursday said.

More than 40 oil companies operating in Kazakhstan are subject to this duty, including KazMunaiGas Exploration Production, Zhaikmunai and Karachaganak Petroleum Operating. Kazakhstan's largest oil producer Chevron Corp.-led Tengizchevroil doesn't pay the duty due to a stability clause in its contract...cont'd

http://www.rigzone.com/news/article.asp?a_id=66540


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Background articles:


Kazakhstan Won't Drop Caucasus Export Route for Oil

by Kadyr Toktogulov
Dow Jones Newswires
Thursday, September 04, 2008




Kazakhstan won't drop the Caucasus as an export route for its oil despite regional tensions caused by a conflict between Georgia and Russia, chief executive of Kazakh state oil and gas company said Thursday.

CEO Kairgeldy Kabyldin of KazMunaiGas told reporters in the capital, Astana, that Kazakhstan has restored shipments of the Kazakh crude oil via the Georgian port of Batumi to earlier levels. Oil is shipped to Batumi on the railroad from Azerbaijan's capital of Baku.

"I believe that the increased transit of oil from the Caspian Sea to the Black Sea, from Azerbaijan to Georgia can become a stabilizing factor for the region," Kabyldin said. "Involvement of foreign and Kazakh companies (in the region) will help reach agreements on stability and security in the region more quickly."

He said that Kazakhstan ships 2.5 million metric tons of oil a year through KazMunaiGas-owned Black Sea port in Batumi.

Oil shipments through Batumi were halted after the armed conflict erupted last month between Georgia and Russia over Georgia's separatist region of South Ossetia...>

http://www.rigzone.com/news/article.asp?a_id=66264

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Karachaganak oil now subject to export tax

Eric Watkins
Senior Correspondent

LOS ANGELES, July 23 -- Kazakhstan, apparently reversing an earlier ruling, has announced that the consortium developing Karachaganak gas field must pay a new oil export duty.

"Karachaganak has become a payer of the export duty," said Deputy Finance Minister Daulet Yergozhin, referring to the consortium comprised of Eni SPA 32.5%, BG 32.5%, Chevron Corp. 20%, and Lukoil 15%.

Yergoshin also said the finance ministry soon plans to expand the list of 38 eligible companies announced in May when the government established the export duty.

The export tax, introduced on May 18, comes to $109.91/tonne of crude oil and $27.43/tonne for those who pay royalties for exported oil and gas condensate. The customs duty heavy distillates, coke, and bitumen exports is $82.20/tonne.

At the time, the BG-Eni consortium and the Chevron-led Tengizchevroil joint venture both were excluded from the list due to their long-term contracts with the government under which they were considered exempt from any additional taxes.

The Karachaganak consortium's operations are regulated by a production-sharing agreement signed in 1997 by the Kazakh government and the group. The consortium has the right to continue operating the fields until 2038.

However, at the end of May, Kazakh Finance Minister Bolat Zhamishev said that all subsurface resource producers might have to pay the crude export duty.

The consortium faced threats of closure when the Kazakh customs control department in Atyrau would not sign off on an oil export declaration for June. It said the ministry of energy and mineral resources had not provided notification of whether the consortium had to pay the export duty.

One official had said at the time that if the issue were not resolved, Karachaganak might have to halt exports on the Caspian Pipeline Consortium (CPC) pipeline.

At that time the consortium faced a choice, he said: either it paid the duties for June in order to keep exports flowing, or it defended its position, in which case the CPC pipeline might be closed to it...cont'd

http://www.ogj.com/display_article/335184/120/ARTCL/none/DriPr/1/Karachaganak-oil-now-subject-to-export-tax/



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Kazakhstan: Rethinking Russia's hold on gas market

Kazakhstan has been playing a very delicate game of trying to promote its interests and reduce its dependence on Russia without completely alienating its powerful Western neighbor.

by Silk Road Intelligencer Monday, December 03, 2007

...While Karachaganak and KPO had their own share of controversy in the past, compared to the environmental difficulties of the Tengiz field operated by Chevron and the well-publicized troubles of Eni, the operator of the giant Kashagan field, the Karachaganak project can be regarded as a success story. Last week, KPO, the international consortium developing the field celebrated the 10th Anniversary of the signing of the Karachaganak Final Production Sharing Agreement (FPSA).

The project itself - currently the biggest internationally funded project in Kazakhstan - has so far met deadlines and cost estimates stipulated in the FPSA, and it will exceed the planned gas production by 20 percent during the third phase of development of the field.

However, despite these successes (which certainly helped to keep off Kazakhstan’s tax police and environmental authorities), Karachaganak faces many of the same problems that all oil and gas producers, especially foreign once, are exposed to.

The main challenge is the geographic location of the field and the lack of distribution options for the natural gas extracted from the field.

Due to the Russia-centric nature of the Soviet gas pipeline network, the only existing export option for Karachaganak gas is to Russia, more specifically the Orenburg Gas Processing Plant just across the border....>

http://www.dailyestimate.com/article.asp?idcategory=35&idSub=175&idArticle=12680