Kazakh Parliament Approves New Law On Caspian PSAs
ALMATY, May 18, 2005 (Dow Jones Commodities News via Comtex)
Kazakhstan's parliament Wednesday approved a new law on production-sharing agreements for oil projects in the Caspian Sea, tailored with a view to the planned auctions of offshore oilfields.
"The new law will regulate offshore oil operations, which are very capital and labor intensive," Member of Parliament Baibol Utepbayev told Dow Jones Newswires. Utepbayev said new legislation limits foreign participation to 50% in each project with no guarantees of operatorship. The other 50% is to belong to Kazakh state oil and natural gas company KazMunaiGaz (KMGZ.YY).
He also said the new law envisages that only Kazmunaigas or the government will hold tenders among subcontractors within each project.
In the case of commercial production, the new law also introduces mandatory oil supplies to local refineries.
Utepbayev said the new rules won't affect existing contracts with oil companies and will guarantee the stability of previously reached agreements.
Kazakhstan's government reportedly planned to start the licensing round for up to 200 exploration blocks in the Kazakh part of the divided Caspian in 2005-2006. Through the massive development of the Caspian Sea, Kazakhstan wants to triple its oil output by 2015 from the current level of 1 million barrels a day.
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