Kazakhstan plans to double oil export duty

KAZAKHSTAN plans to double its crude oil export duty to US$40 per tonne from January 1, two government sources told Reuters yesterday, less than six months after reinstating the tax when prices recovered from lows in the financial crisis.

The government cabinet of Kazakhstan, Central Asia's biggest oil producer, will discuss the issue at its regular meeting on Tuesday, both sources said.

"This data already officially exists. We are expecting the decree from the government," one of the two sources said.

A government spokesman said budgetary issues would be discussed on Tuesday, but added he did not have any details of the meeting and had no knowledge of revisions to the oil duty.

Kazakhstan's decision to bring back a tax on almost all crude oil exports in July effectively revised the terms of its long-standing agreements with two major foreign-led oil groups.

At US$20 per tonne, the current duty is a tenth of the level applied before the tax was scrapped in January 2009 in a move to help producers ride out low crude prices during the global financial crisis.

Analysts have compared Kazakhstan's reintroduction of the duty to efforts by Russia and other resource-rich nations to become more assertive with foreign investors at a time of a high oil price cycle. The move follows a number of steps by Kazakhstan over the past few years to revise production-sharing terms with groups led by US energy giant Chevron and a consortium of ENI and BG, despite protests from the majors.

The Chevron-led Tengiz group and the Karachaganak consortium led by BG and ENI will no longer be exempt from the duty, Finance Minister Bolat Zhamishev said in July. Kazakhstan hopes to collect about US$406 million in additional revenue from the current duty by the end of this year.

Tengiz and Karachaganak are set to be dwarfed by another project, Kashagan, when an ENI-led group launches production at one of the world's biggest fields later this decade. Reuters