Chevron: Abiding by International, Kazakh Sulfur Rules

ALMATY, Kazakhstan Oct. 4, 2007 (Dow Jones Newswires)

The top official of the Chevron Corp.-led (CVX) oil consortium in Kazakhstan said Thursday the group is complying fully with international and Kazakh regulations on sulfur disposal.

"We store it (sulfur) completely in alignment with international standards and completely in alignment with (Kazakh) environmental legislation," Todd Levy, general director of the Tengizchevroil consortium, told reporters on the sidelines of an energy conference.

The consortium has been fighting off Kazakh government accusations that the group has been remiss in its environmental responsibilities in the Central Asian country.

As evidence of the consortium's environmental record, Chevron - for the first time since it entered the country in 1993 - sold more sulfur than it produced in 2006, Levy said.

Tengiz's oil is laced with deadly hydrogen-sulfide gas and presents an enormous technical challenge. The consortium has been stripping out the sulfur and stockpiling it as pellets in massive storage facilities. That has caused problems with the Kazakh authorities, who say the sulfur is damaging to the environment.

Levy said the group was on track to repeat the 2006 sulfur sales in 2007.

He added that the consortium continued to work closely with the Kazakh government and reiterated it would aggressively challenge the government's assertions, which have resulted in a $609 million lawsuit against the consortium.

Chevron, which has a 50% stake in the Tengizchevroil project and 20% in another big field, Karachaganak, is Kazakhstan's largest private-sector oil producer by output.

The consortium has just invested $6 billion to expand Tengiz, which has recoverable reserves of 6 billion-9 billion barrels of oil.

Copyright (c) 2007 Dow Jones & Company, Inc.

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