Kazakhstan May Expel Foreign Workers From BG, Eni-Led Venture

April 6. Bloomberg

By Nariman Gizitdinov

Kazakhstan May Expel Foreign Workers From BG, Eni-Led VentureKazakhstan is seeking to expel workers from the BG Group Plc and Eni SpA-led Karachaganak venture, the central Asian nation’s second-largest producing oil field, for violating immigration laws.

“We have questions on about 270 of the venture’s employees and have started by suing seven for receiving their labor permits and visas improperly,” Alexander Ogay, a senior official at the Prosecutor General’s Office in Astana, said in a phone interview. “The punishment for the violation is a fine and deportation, if the court upholds the prosecutor’s claim.”

Kazakhstan is cracking down on the venture, Karachaganak Petroleum Operating BV, while seeking to enter the country’s only major oil development without state participation. The government wants a stake to boost profit from the project, Kairgeldy Kabyldin, the head of state-run energy producer KazMunaiGaz National Co., said in February.

Francesca Ciardiello, an Aksai, Kazakhstan-based spokeswoman for Karachaganak Petroleum, declined to comment immediately when called by Bloomberg News.

The seven foreign workers received visas and permits through the venture itself, rather than through their employers who are shareholders in Karachaganak, in breach of Kazakh law, Ogay said.

Kazakhstan’s economic crimes and corruption agency is investigating “illegal earnings” of 104 billion tenge at Karachaganak, saying on March 26 that the venture profited in 2008 from oil output that wasn’t approved by the state.

The Finance Ministry asked Karachaganak Petroleum to pay about 20 billion tenge ($136 million) after a probe of its 2004 taxes, according to a copy of a ministry letter obtained by Bloomberg News in February. It extended the tax probe into payments by the venture in the years 2005 to 2008.

Reading, England-based BG Group and Rome-based Eni are the largest shareholders in Karachaganak Petroleum, each with a 32.5 percent stake, while Chevron Corp. has a 20 percent interest and OAO Lukoil holds 15 percent.