Kazakhstan opens criminal case against Tengiz

July 15. Reuters

Kazakhstan opens criminal case against TengizKazakhstan’s financial police said on Thursday it had opened a criminal case against Chevron-led Tengizchevroil, accusing it of producing $1.4 billion worth of oil in excess of its production licence agreement.

“We have launched a criminal case under suspicion of illegal entrepreneurship involving a particularly large amplification of income,” said Murat Zhumanbai, spokesman for the Agency for Fighting Corruption and Economic Crime – Kazakhstan’s financial police.

The agency voiced its suspicions last week, and said it would investigate.

A spokeswoman for Tengizchevroil reaffirmed on Thursday that the company is producing oil in strict accordance with the law and had not broken any contractual agreements with the government of Kazakhstan.

Chevron owns 50 percent of the Tengizchevroil venture, ExxonMobil holds 25 percent and Kazakh state oil and gas firm KazMunaiGas 20 percent. Russia’s LUKOIL owns the rest.

Kazakhstan is Central Asia’s largest economy and oil producer and has attracted more than $100 billion in foreign investment, most going into the natural resources sector, since gaining independence two decades ago.

In recent years, Western energy firms have come under increasing pressure from the state as it looks to rework production sharing agreements it says were initially skewed in favour of foreign operators and at a loss for the state.

State-owned firms have been raising their influence in the sector and acquisitions often follow campaigns in which the government accuses companies of environmental, tax or contract violations.

http://www.reuters.com/article/idUSLDE66E0T820100715

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