Kazakh head OKs buyout of foreign-held oil stakes

03 Dec, 2004

Kazakh President Nursultan Nazarbayev signed a bill into law on Thursday giving the state the right of first refusal when foreign firms are selling stakes in oil and minerals joint ventures. The amendments to the Central Asian state's subsoil law, earlier passed by the compliant parliament, are widely seen as boosting the government's position in talks with an ENI-led consortium for a buyout of assets owned by BG in the giant Kashagan oilfield.
Kazakh Energy and Mineral Resources Minister Vladimir Shkolnik said the speedy parliamentary approval of an amended subsoil bill was not meant to influence the country's legal wrangling with the Western consortium over BG's stake.
But he made clear the government might use the amended law at any time of its choosing, "if it sees that some firms aim to obtain a monopoly in a certain venture".
"The state reserves for itself the right to buy out a (foreign-held stake) and then resell it," Shkolnik told Reuters. "Under the constitution, natural resources are state property."
Nazarbayev's press service said the new subsoil law would come into force after its publication, expected on Friday.
Oil-rich Kazakhstan, which aspires to join the world's super league of oil producers by tripling its output to over 3.0 million barrels per day by 2015, said last month it had "agreed in principle" to buy BG's stake in the ENI-led group.
But the government is yet to strike a final agreement with the Western consortium on what proportion of the 16.67 percent stake the state will get.
Any deal will be on the basis of the $1.23 billion price BG had agreed with its partners.
Shkolnik said the next round of talks on BG's stake would probably take place in the Kazakh capital Astana in early December. He declined to give an exact date.

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