Kazakhstan seeks to acquire pre-emptive buying rights

Oct 13, 2004 02:00 AM

Kazakhstan's Parliament Majilis Deputy Victor Vesnin announced that the Conciliatory Commission of both chambers of Kazakhstan's Parliament support legislative amendments that will give Kazakhstan pre-emptive buying rights to foreign investment contracts involving production of the nation's vast oil resources.

The new draft law proposed by the Senate is entitled "On inserting amendments and addenda into certain regulatory acts covering issues of subsurface use and oil operations performance" which provides the state with pre-emptive rights for buying out rights for subsurface use of its hydrocarbon resources.
This pending legislative amendment provides KazMunaiGaz, Kazakhstan’s national oil and gas company, with the right to represent the interests of the state in contracts with foreign companies performing oil and gas operations in Kazakhstan and its subsurface.

"We provide the state with the jus primae noctis," explained Mr Vesnin. "If foreign oil companies and investors working in Kazakhstan decide to sell their contracted stake in a project, it must be the state that has the pre-emptive right to buy it out.”
“There was a time when Kazakhstan had to sign such contracts due to budget deficits, but today we have improved that situation and we can start winning back the interests of the state." Mr Vesnin added that the new amendments do not contradict Kazakhstan's Constitution because according to the Constitution "all of Kazakhstan's land and subsurface belongs to the people."

Kazakhstan is the largest and most advanced nation among the Central Asian republics. The country became independent in 1991 and since then has transitioned to a market economy.
The geopolitical status of Kazakhstan makes it an inevitable bridge between Europe and Asia as well as the leading country of the region. Kazakhstan, a democratic and lay state, is committed to anti-terrorism and does not encounter ethnic confrontation within its borders.

Kazakhstan has hydrocarbon reserves estimated at 100 bnbarrels. By 2008, these reserves will position Kazakhstan as a major oil-producing nation. Kazakhstan also has abundant natural resources including gold, silver, uranium, chromium, phosphor, nickel and coal.
To improve its status as a world-trading partner, Kazakhstan is aggressively pursuing reforms that include social issues, decentralization, education, modernizing government administration, agriculture and small business development.

Source: IBC
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