Oil companies are looking ahead to come into tax negotiation with Kazakhstan authorities

/REUTERS, Almaty, Olzhas Auezov, October 6, 06/ - Western oil companies previously criticize high taxes, adopted in Kazakhstan on the new projects, but carry out negotiation on the new deals and consider to get indulgence next year. Two years back the government meaningfully increased taxes on the new tax projects, and also introduced the norm on obligatory 50% participation of the state company Kazmunaygas in all new projects at Caspian shelf. "Companies are not in hurry to invest money after changes of tax regime in year 2004," Daniel Witt, President of the company International Tax and Investment Center, represented interests of oil-gas sector, said at the international conference in Almaty. The deals, which were concluded within this period, contain elements of the previous tax norms, or appear as contracts on conducting explorative works, which allow to submit these issues to future considerations, tax consultants say. "This is a step towards future," Corthny Fauler, the partner on taxes of PricewaterhouseCoopers in Kazakhstan, said. Such an undertaking will be justified, Witt considers. "We consider that reforms, targeted at improvement of several norms, introduced in year 2004, will be examined at the beginning of next year," he said. "BEST INVESTMENT" Government of Kazakhstan has not announced about such plans. However, the managing director of Kazmunaygas Zhakyp Marabaev confirmed at the conference that authorities and the state company intend this and next year to conclude PCA on the new Caspian blocks with Norway Statoil, Indian ONGC, and also with consortiums of Korean and Chinese companies. Another representative of Kazmunaygas vice president Zhaksybel Kulekeev said that English-Holland company Shell and American ConocoPhillips compete for getting the block "Н", and authorities will select the winner up to the end of the year. Besides, Kazakhstan has more several blocks, in which it considers to borrow billions dollars investments. "Projects in Kazakhstan Caspian sector seem to be one of the most profitable funds investment," Ministry of energy and mineral resources Baktykozha Izmukhambetov commented. The country considers arranging the oil extraction within 10 years up to 150 m. tones a year, mostly at the expenditures of working out the shelf. [2006-10-06]