Karachaganak oil now subject to export tax
Kazakhstan, apparently reversing an earlier ruling, has announced that the consortium developing Karachaganak gas field must pay a new oil export duty.
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.
The initial 38 oil producers liable for the export tax are: Kazmunaigas Exploration Production, Kazakhturkmunai, Kazakhoil-Aktobe, Petrokazakhstan-Kumkol Resources, Turgai Petroleum, Oil Co. KOR, CNPC-Aidan Munai, South Oil, Zhaikmunai, Fial, Tasbulat Oil Corp., Khazar Munai, Karakudukmunai, Zhalgiztobemunai, Emir Oil, Firma Fiztech, Lancaster Petroleum, Caspi Neft TME, Sagiz Petroleum Co., Aral Petroleum, Kazneftekhim Kopa, Sazankurak, Alties Petroleum, Atyraumunai, Svetland Oil, Arnaoil, Gyural, Caspi Neft, Pricaspian Petroleum Co., Adai Petroleum Co., NBK, Tobearal Oil, JV Matin, Potential Oil, Ekogeoneftegas, Embavedoil, Samek International, and Kozhan.
Contact Eric Watkins at firstname.lastname@example.org.