Kazakhstan's finance ministry said it had doubts about the legality of a number of existing oil contracts following a review of production sharing agreements (PSAs) in the industry. The move follows an order by President Nursultan Nazarbayev to strip foreign oil companies in Kazakhstan of immunity from tax changes and rewrite their original contracts signed in the 1990s.
"We have analysed PSAs signed earlier and there are some questions... regarding the legality of some contracts," the finance ministry's tax committee chairman, Daulet Yergozhin, told reporters. He said the review would be completed by 1 April but did not name the targeted contracts.
The government's plan means oil companies working under PSAs in projects such as Kashagan, the world's largest oil discovery in the last 40 years, and Karachaganak, Kazakhstan's top gas condensate field, will pay at least two additional taxes, according to a Reuters report. Western-led consortiums in Kazakhstan have not commented on the government's plan. Analysts say the list of affected companies could include Chevron , ExxonMobil , Eni , BG , Shell , Total and others.
Author: Tan Hwee Hwee
