Kazakh budget to reap extra $341 mln from oil firms

/REUTERS, Astana, May 13, 04/ - Kazakhstan's 2004 budget will get a 46.8 billion tenge ($341 million) boost in the form of payments from Western oil majors developing its oil riches for delays in the project, a senior government official said on Thursday. "The main changes (to the budget) are due to one-off payments by our tax- payers -- namely, 46.8 billion tenge," Economy and Budget Planning Minister Kairat Kelimbetov told parliament, presenting the revised state budget for this year. "This means that 46.8 billion tenge are the kind of revenues that have nothing to do with high oil prices and are not linked to revised macroeconomic indicators (for 2004)," he said. Kelimbetov said higher-than-expected world prices for oil -- the core of Kazakh exports and the backbone of the economy -- and faster-than-forecast gross domestic product growth this year would bring in an additional 11.6 billion tenge ($84 million). Referring to the payments to be made by Western oil firms, Kelimbetov said a total of $150 million was due to be transferred to the budget from an ENI-led consortium for delayed oil output at the giant Kashagan offshore field in the Caspian. The ENI-led consortium, which includes Royal Dutch/Shell , Total, ExxonMobil, ConocoPhillips and Japan's Inpex, has agreed with the government on the schedule of compensation payments for shifting the start of production at Kashagan to 2008 from 2005. Another $100 million will come from Britain's BG which has decided to pull out of the Kashagan project. "If a company leaves (a project), then, accordingly, it should pay a corporate income tax," Kelimbetov said, referring to the penalties. Another 10.8 billion tenge ($79 million) is to be paid by Tengizchevroil joint venture, developing the giant Tengiz field and led by U.S. major ChevronTexaco, which had agreed to pay higher royalties, Kelimbetov said. He did not elaborate. Kelimbetov said the budget deficit would be kept unchanged, within the originally planned 92.7 billion tenge or 1.8 percent of GDP, because budget spending would be increased by the same $425 million, equivalent to extra revenues. The ENI-led consortium and Kazakhstan signed a deal in February agreeing to delay production at Kashagan until 2008 from the original target of 2005. The terms of the agreement were not disclosed at the time. The consortium companies have said the depth of the oil, deep below the Caspian which partly ices over in winter, is the main reason for pushing the date back. ($1 = 137.15 tenge) [2004-05-13]