Kazakh state could seize oil fields from investors: PM

Kazakh state could seize oil fields from investors: PM
AFP
AFP - 24 minutes ago

ASTANA (AFP) - The Kazakh state could seize oil fields and mineral deposits from private investors, Prime Minister Karim Masimov said Thursday, following a series of high-profile business disputes involving top foreign energy majors.

"If contractual obligations for the development mineral resource deposits are not respected, the contracts will be cancelled and (the deposits) will be returned to the state," Masimov told a government meeting in the capital Astana.

Kazakhstan, a former Soviet republic in Central Asia located between China and Russia, is rich in natural resources including crude oil, gold and uranium. Western investors have flocked to the country since independence in 1991.

But the climate for foreign investors has worsened in recent months and the authorities have accused Western oil majors such as ENI and Chevron of failing to respect contracts for some of the biggest new oil fields in the world.

Critics have accused the authorities of engaging in economic nationalism.

Kazakhstan last year adopted a law that allows the authorities to scrap or change any contract with investors in the natural resources sector based on economic interests or national security.

Kazakh Energy Minister Sauat Minbayev said at the meeting on Thursday that so far 97 contracts have been cancelled and 180 companies in the natural resources sector have been informed that they are in breach of contract.

Earlier this week, US energy giant AES was forced to sell a power plant and a coal mine to local group Kazakhmys for 1.5 billion dollars (one billion euros) after being threatened with fines of up to 200 million dollars.

Another dispute between Kazakh authorities and Western oil majors over the massive Kashagan oil field was only resolved last month after Kazakh state company Kazmunaigas was given a bigger role in the project.