Kazakh threat to expel expat oil workers

The accusations mark an escalation in a feud at the Karachaganak field, in which the government is seeking a stake. It is the only foreign-led oil project where the state is not involved.
The Kazakh general prosecutor’s office said it was investigating 270 expatriate employees at Karachaganak for receiving work permits and visas improperly. Seven foreign workers at the field have already been sued for breaching Kazakh immigration rules.
BG and Eni, along with Chevron and Lukoil, their partners at Karachaganak, are facing accusations including tax evasion, financial wrongdoing and environmental abuse.
The dispute has stirred memories of a 2008 spat at another oilfield, Kashagan, which ended when KazMunaigas, the country’s state oil company, muscled in on the project, the biggest oil development in the Caspian Sea.
“This is the usual softening up process,” said an official close to the consortium. “They [the Kazakhs] are preparing for serious talks.”
But discord within the consortium might hinder a resolution, according to people familiar with the matter. The European companies are more ready than Chevron to dilute their stakes to make way for KazMunaigas.
Karachaganak was one of three oil fields Kazakhstan handed to foreign oil majors for development in the 1990s when crude prices were low and the country was battling an economic slump.
As oil prices rose during the past decade Kazakhstan tightened investment conditions amid complaints that foreign majors had exploited the country’s past weakness to win advantageous contracts.
Nursultan Nazarbayev, the country’s authoritarian president, said this year that all oil investors should be subject to the same tax regulations, and founded a new oil ministry to bolster the state’s interests in the industry.
KazMunaigas confirmed it was interested in gaining a stake in Karachaganak.
The BG/Eni-led group has been locked in a tax dispute with the government since last year.
Last month Kazakhstan accused the group of illegally earning $700m (€519m) of profits by exporting more oil than allowed by its contract and launched a criminal probe.
Kazakhstan is also investigating the group for allegedly breaching environmental rules.
BG and Eni each own a 32.5 per cent interest in the project. Chevron has 20 per cent and Lukoil 15 per cent. Eni, Chevron and BG declined to comment.

"The Financial Times"