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Kazakhstan to Tax Oil Production at Up to 20% of Output Value
in-en.com  2008-7-15 10:54:02  

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Kazakhstan will tax oil production at 4 percent to 20 percent of output value depending on the size of the field as the government seeks greater revenue from its energy assets, a deputy finance minister said.

``The bigger the oil field, the bigger the tax will be,'' Daulet Ergozhin said today by telephone from the capital Astana. The government will try to maintain the attractiveness of oil- field investment in assessing the tax, he said.

Kazakhstan, which has 3.3 percent of the world's proven oil reserves, is seeking a greater share of profit from high commodity prices with new taxes on output and exports.

Ergozhin said Karachaganak Petroleum Operating BV, the Kazakh oil venture of BG Group Plc and Eni SpA, paid 10 billion tenge ($83 million) in export taxes. The government is considering imposing the crude export tax on Chevron's Kazakh venture, Tengizchevroil, he said. The two ventures are developing some of Kazakhstan's largest oil fields.

The government should apply the output tax to all producers, and this is why all oil contracts must be ratified by parliament, Ergozhin said.

Contracts for Karachaganak, Tengizchevroil and the Kashagan crude project contain fixed tax rates. If parliament votes to approve the contracts, the ventures won't be affected by the new production and export taxes.

Taxes on the production of oil, natural gas and metals will come into force on Jan. 1 and should give subsoil users ``at least 10 percent'' profitability, Deputy Prime Minister Erbol Orynbayev said on June 18.


 
Author:Bloomberg  From:Bloomberg  Edit:steven
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