Lifting of moratorium on new hydrocarbon fields development in Kazakhstan to increase oil production

Oil&Gas Materials 30 January 2013 16:37 (UTC +04:00)

Azerbaijan, Baku, Jan. 30 /Trend. E. Kosolapova/

Lifting of the moratorium on new hydrocarbon fields development in Kazakhstan will increase oil production in the country, expert at the Kazakhstan Institute of Political Solutions Sergei Smirnov believes.

"Oil production remained stagnant for 2-3 years in our country hovering around 80 million tons. In previous years, the growth in oil production was higher. I think this measure is aimed at increasing of oil production rate and number of developing oil fields," Smirnov told Trend over phone on Wednesday.

Earlier Kazakh Oil and Gas Minister Sauat Mynbayev said the moratorium on development of new oil fields would be lifted in Kazakhstan in 2013.

According to Smirnov, Kazakhstan does not have enough resources, technologies and specialists to conduct exploration work by its own. Especially it concerns offshore zones. So it is easier for the country to join some project when its profitability has been proved, he said.

"According to the law, Kazakhstan has the priority right to purchase shares in the hydrocarbon projects developing on its territory. It means, if any company sells its stake, it should first offer this share to Kazakh national company. And if the national company refuses the stake, it can be offered to someone else. And even in this case the deal needs approval by the Kazakh government," Smirnov said.

According to the expert, currently Kazakhstan successfully asserts its interests in the major oil projects. And acquisition of stakes in Kashagan and Karachaganak by Kazakh National company proves this fact.

Smirnov believes the lifting of the moratorium on new hydrocarbon fields development in Kazakhstan will attract mainly Chinese investors to the country.

"China strives for oil project in Kazakhstan more than other countries. Chinese companies overpay for stakes in our projects. I think they will be the most active," the expert said.
Moratorium on issuance of licenses for subsoil use in Kazakhstan was introduced in 2008, when the government began to develop a new tax law, stipulating abolition of such contract type as a production sharing agreement.

New Tax Code, which canceled contract stability and envisaged tightening of mining sector taxation, entered into force on January 1, 2009.

In November 2012, Kazakh President Nursultan Nazarbayev instructed the government to consider lifting the moratorium on extraction of certain minerals to make the region more attractive for investors.