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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