Kazakhstan's new prime minister criticized foreign oil companies Thursday and ordered the government to tighten control over their activities in the energy-rich Central Asian nation, the government said.
Karim Masimov, who assumed office last week, accused unspecified foreign oil companies of "unsatisfactory" implementation of contracts, citing "extensions of the prospecting period, delays with the start of commercial extraction and
raising costs," according to the government press office.
Masimov told a meeting at the Energy Ministry that such practices were damaging Kazakhstan's economy.
Last year, Kazakhstan downgraded its long-term oil output forecast from 3 million to 2.6 million barrels a day by 2015 because of delays with development of Caspian Sea fields.
The start of production at the giant Kashagan oil field is not expected before 2009-2010 because of technological difficulties. The international consortium let by Italy's Eni SpA had originally planned to start production in 2005.
The Kashagan field in northern Caspian Sea, the world's last biggest oil discovery in the past 30 years, is expected to play a crucial role in filling a new pipeline completed in 2005 and designed to carry Kazakh oil to energy-hungry China.
The ex-Soviet republic's government has also been concerned about the rising costs of a project to develop giant Karachaganak gas field that is operated by another international consortium led by Britain's BG Group PLC and Eni.
Under contracts covering Kashagan and Karachaganak, the Kazakh government begins to get its share of revenues only after investors recoup their developing costs.
Masimov said all oil contracts with foreign companies must be effectively monitored and "timely measures" must be taken in case of "shortcomings."
In the past few years, Kazakhstan has been pursuing a policy to increase state assets in its vast energy sector that is currently dominated by Western investors.
(AFX News, 18/01/2007)