Kazakhstan says Kashagan oil safe from tax review

April 21. Reuters. ASTANA

By Raushan Nurshayeva

* Kashagan to keep immunity to tax changes
* Talks continue with Karachaganak group

Kazakhstan says Kashagan oil safe from tax reviewCentral Asia’s top oil producer Kazakhstan, which has announced plans to review some contracts with foreigners, will not target its largest project Kashagan, Energy Minister Sauat Mynbayev said on Wednesday.

Kazakh President Nursultan Nazarbayev said this year contracts protecting oil ventures from tax changes must be reviewed but did not name any of them.

The development of Caspian offshore field Kashagan, the world’s largest oil discovery in 40 years, is covered by one of the contracts known as production sharing agreements (PSAs).

But Mynbayev said it was not a target of the review.

“(Such work) is not being done with regards to Kashagan,” he told reporters.

Kashagan is being developed by Eni, Total, Shell, ConocoPillips, ExxonMobil, Inpex  and Kazakh state firm KazMunaiGas. Commercial production at the field is due to start in 2013.

Two other large projects with tax stability clauses are Chevron-led  Tengiz and Karachaganak, which is developed by Eni, BG, LUKOIL  and Chevron.

Mynbayev declined to comment on Tengiz and said talks were under way with Karachaganak “on a broad range” of issues.

The government has accused the Karachaganak consortium of tax evasion this year and said it wanted a stake in the venture which is Kazakhstan’s top gas producer. Karachaganak group says it has obeyed the law.