Oilmen of Kazakhstan against oil export restrictions

/IRBIS, Jan.14, 00/ - REUTERS informs, with the reference to representatives of Kazakhstan Petroleum Association, that foreign investors, who work in oil and gas sector of Kazakhstan, expressed their worry about the government's decision to limit crude oil exports to 22 mln tons in 2000. "Total production volume for the next year, excluding production of gas condensate, will reach about 30 mln tons of oil in Kazakhstan as a whole, which means about 8 mln tons will be exported" said the chairman of Kazakhstan Petroleum Association Edward Veron, representative of Texaco. More than 30 foreign companies working in oil and gas sector of Kazakhstan are the members of Kazakhstan Petroleum Association, among them Texaco, Chevron, Agip, Total and others. Texaco representative says domestic oil prices are lower than export prices. He said: "Now the question is whether oil producers will have a desire to supply these 8 million tons into domestic market at the prices lower than world prices. This is the question we are trying to solve and find answers to it with government bodies in charge of the solutions to these problems". The decision to limit oil exports to 22 mln tons in 2000 was made in late 1999. The reason for this was the supply shortages at three domestic oil refineries, since oil companies prefer to export crude oil. This government decision "is not a dogma if oil production grows fast", said the representative of the Ministry of energy, industry and trade of Kazakhstan. The Ministry should also approve annual supply schedule and adjust them quarterly considering load of three Kazakhstani refineries. Foreign oil companies worry about negative impact this decision may have on their businesses. "This may impact contracts the companies work by, and projects, which are currently underway or estimated to be prosperous for future developments" said Verona. The representative of the Association also mentioned that according to contracts Kazakhstan compensates for possible losses of the companies that may occur as a result of government's decisions except for the "protection of national interests" clause. Foreign investors are happy to the fact that the government of Kazakhstan is ready for talks with oil companies on this matter. A group of representatives among foreign companies and interested state bodies is formed. Annual production of oil reaches about 27-28 mln tons of oil. Capacity of Atyrau-Samara pipeline is limited to 11 million tons, and railroads have 5-6 mln ton capacity. The rest of oil is exported through one and singe sea port of Aktau. "I hope these matters, which worry us, at least, will by resolved painlessly for us, and not to reject further possible investors, so that we could both have mutual benefits", said Verona.