Kazakhstan Toughens Position in the Oil and Gas Sector

Excerpt from Caspian Investor by Svetlana Milyaeva

First quarter results have not caused any optimism among Kazakh authorities.The global financial crisis has hit Kazakhstan, lowering rates of economic growth and reducing incomes by 3 percent. According to President Nursultan Nazarbayev, “there is a hole in the budget,” that is necessary to fix. Moreover,the continuing rise in oil products prices on the domestic market resulting fromthe lack of such products has caused the next rise in inflation. Astana has received another postponement in Kashagan development from the foreign partners of the consortium, the third delay in the initiation of production. The response has not been long in coming. The Kazakh government has startedtalking about rigid sanctions for the failure in production terms at Kashagan,has introduced export duties on oil and a ban on oil products export, has promised to toughen requirements to subsoil users regarding transparency of purchasing procedures, and has suggested a change in import custom duties forforeign producers in the oil and gas sector.

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Determining the Russian Offshore External Borders

Excerpt from Russian Petroleum Investor by Vladimir Baidashin

The question of fixing the Russian continental shelf external border arose after the Russian institute VNIIOkeanologiya using the icebreaker Russia conducted geological-geophysical research in 2007. The research zone encompassed the adjoining of the underwater Lomonosov Ridge with Laptev and East Siberian Sea shelves, substantiating the external border of the Russian continental shelf. During the work, arctic explorers in a bathyscaphe lowered to the ocean bottom near the North Pole, took ground samples and put there a Russian flag.

In September 2007, the Ministry of Natural Resources (MNR) reported that, “Preliminary analysis of data obtained for a model of the earth’s crust allows confirmation that the structure of the Lomonosov ridge corresponds to world analogues of a continental crust and therefore is a part of the adjoining continental shelf of the Russian Federation.”

For 2008-2009, plans call for preparation of geological substantiation for the Russian application defining its continental shelf external border and carrying out of negotiations with Denmark, Canada and the US on delimitation of the continental shelf in Arctic regions. Then, in 2011, Russia plans to send the United Nations (UN) an expanded application for establishing an external border in the Arctic regions in connection with acknowledgement of the continental nature of the Lomonosov Ridge and Mendeleyev’s Elevation with their belonging to the extensions of Eastern Siberia. The Ministry of Foreign Affairs remarks that, from the legal point of view, Russia from the very beginning operated within the limits of the Convention on the Law of the Sea.

By estimations of experts, the increase in the area of the Russian continental shelf in Arctic regions outside a 200-mile zone can total 1.2 million square kilometers. Estimates of hydrocarbon resources in the territory are approximately 4.9 billion tons of conditional fuel.

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