Chevron-led Kazakh Venture Doubles Oil Extraction Tax Payment

Sep 29. Bloomberg

By Nariman Gizitdinov

Chevron-led Kazakh Venture Doubles Oil Extraction Tax PaymentChevron Corp.’s Kazakh oil venture, the country’s biggest exporter of the fuel, more than doubled crude extraction tax payments as the government seeks a larger share of resource revenue.

TengizChevroil paid 245.2 billion tenge ($1.7 billion) in the first seven months, compared with 122 billion tenge in all of 2009, according to data published on the Finance Ministry’s Tax Committee website, without elaboration.

Kazakhstan, which holds 3 percent of the world’s oil reserves according to BP Plc, introduced the extraction tax, replacing royalty payments, to boost revenue and narrow a budget deficit. The government started levying export taxes on crude oil from the venture led by Chevron, in the government’s latest effort to gain more from the country’s energy wealth. The Central Asian nation raised the oil export tax to $20 a metric ton ($2.73 a barrel) in August and plans to double that to $40 starting next year.

TengizChevroil increased oil production to 12.5 million tons in the first half, more than a half of the 22.5 million tons it produced in 2009, the company said on its website.

The venture’s total tax burden rose to 514 billion tenge through July from 452 billion tenge in all of 2009, the tax committee said. The venture paid 248 billion tenge in corporate income tax, compared with 294 billion tenge for all of 2009, according to the statement.

Linsi Crain, an Atyrau-based spokeswoman for TengizChevroil wasn’t immediately available for comment. Raikhan Sharipova, a spokeswoman for tax committee, declined to comment immediately.

Chevron, based in San Ramon, California, holds 50 percent of TengizChevroil. Exxon Mobil Corp. has 25 percent, state-run KazMunaiGaz National Co. owns 20 percent and Lukarco, owned by Russia’s OAO Lukoil, 5 percent.