Intl Group Launches Appeal Against Possible Kazakh Tax Claim

BG Group said Wednesday an international consortium developing the giant Karachaganak oil and gas field in Kazakhstan has lodged an appeal against a possible claim for tax arrears. Tuesday, Lyazzat Kiinov, Kazakhstan's deputy minister of energy and resources, told Dow Jones Newswires that the consortium, which includes BG, is facing a "very large sum" of tax arrears, although the claim is "less than 1bn dollars".

Italy's Eni, Russia's LUKoil Holdings and ChevronTexaco of the US are the other members of the consortium developing the field, which in August produced 600,000 tons of oil and gas condensates.

"We are confident there is no basis for the claim and we have formally responded to the tax issues raised," said BG spokesman Jonathan Miller, adding that "in respect of the fines and penalties we have lodged an appeal". He declined to comment on the figure of 1bn dollars mooted by the Kazak official. Tuesday, Kiinov declined to say whether the alleged tax arrears were related to an investigation into BG Group for 5m dollars worth of underpayments in customs duties from the Karachaganak field.