Kazakhstan undertakes main risk in shelf development

Mar 17, 2004 01:00 AM

Main risks in the development of Caspian oil and gas fields are borne by Kazakhstan.
This statement has been made by Vladimir Shkolnik, minister of energy and mineral resources of Kazakhstan, on 17 March, during a round table "Taxation of subsurface users in Kazakhstan" in Astana.

"I agree that our country must share commercial risks with foreign investors when the oil and gas fields are developed," Shkolnik said, commenting on critical remarks by representatives of the foreign investors on changes in the Tax Code of the republic concerning the subsurface use.
"But the investors must realise that Kazakhstan has undertaken the main risk in the shelf development allowing them to operate there. It is the republic, not the investors that will bear responsibility for any incident in the Caspian basin and its consequences," Shkolnik explained.

The minister has advised representatives of the foreign investors "to calculate this risk in its monetary expression" and "to turn down the tragic overtones speaking about the taxation of subsurface users" in Kazakhstan.
At the same time the minister of finance of Kazakhstan, Yerbolat Dossayev, has observed that the commercial risks of the investors are being reduced inevitably: "the domestic level of the national economic profitability has grown significantly, the investors risks also diminish, which must be reflected in the taxation of subsurface users," Dossayev noted. He has also informed the participants that Kazakhstan still remains "on the bottom of the list of oil powers" with regard to the quantity of income levied from the oil produced by the investors.

Source: Gazeta.KZ
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