President Nursultan Nazarbayev said on Friday he would compel all oil companies working in Kazakhstan to comply with an international initiative aimed at reducing corruption in the oil industry. The sprawling ex-Soviet state in Central Asia produces 1.3 million barrels of crude per day, a figure set to nearly triple in a decade and place it in the top 10 world producers, and has been embroiled in major oil corruption scandals in the past.
Nazarbayev announced earlier this week that his government would implement the Extractive Industries Transparency Initiative (EITI), an international plan first proposed by British Prime Minister Tony Blair in 2002.
"I never saw any problems with transparency in oil flows in Kazakhstan so that's why I said at the Asia Society forum that we support the initiative," Nazarbayev told reporters after a meeting with investors in the northern Kazakh town of Karaganda.
"If we're talking about resources, we should talk about all of them. All companies operating in oil and gas must participate in this, as must others working with other minerals."
The EITI requires companies to publish what they pay governments in oil, gas and mining projects and for the governments to publish lists of their receipts, in order to highlight discrepancies and make corruption harder to hide.
Some Western oil majors operating in Kazakhstan such as ChevronTexaco and Royal Dutch/Shell, have previously expressed support for the EITI.
Italy's Eni, which will operate Kazakhstan's giant Kashagan oilfield when it comes onstream in 2008, has not publicly endorsed the plan, and nor have national oil companies like China's CNPC, which is active in Kazakhstan.
There is also some doubt that companies seeking to protect confidentiality will agree to publish their payments on an individual basis, preferring to aggregate them in one figure, which would make tracking down bribe payers harder.
Nazarbayev did not say when the project would come into force, but it could make Kazakhstan only the fifth country to adopt it, after Nigeria, Ghana, Azerbaijan, and Kyrgyzstan.
In one of Kazakhstan's most high-profile oil scandals, prosecutors in New York have accused Nazarbayev in pre-trial documents of receiving $60 million in bribes from a US businessman, James Giffen, in the 1990s.
Nazarbayev has said the allegations are a "set up" and Giffen, whose trial has yet to go to court, denies the charges.
Anti-corruption group Transparency International rated Kazakhstan among the top 25 most corrupt countries among 146 that it assessed last year.
Jean Lemierre, president of the European Bank for Reconstruction and Development, welcomed Nazarbayev's decision to implement the EITI.
"Now there's some work to be done on this, probably, to ensure the sound implementation by the government and by the companies but at least Nazarbayev has taken that view in public," he told Reuters. "It's a very good step."
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