Kazakhstan to Start Taxing Oil Exports at $20 a Ton in 30 Days

The largest oil producer in Central Asia won’t tax companies that operate under production-sharing agreements and have an exemption clause, according to a resolution published in the government’s official Kazakhstanskaya Pravda today. Others that are exempt from custom duties and don’t pay royalties are also excluded.

Kazakhstan, which holds 3 percent of the world’s proven oil reserves according to BP Plc, began taxing crude exports in May 2008, then cut the duty to zero from $139.79 a metric ton in January 2009. The earlier tax applied to about 40 producers including Karachaganak Petroleum Operating BV, in which BG Group Plc and Eni SpA hold stakes, and KazMunaiGas Exploration Production.

Chevron Corp.’s largest venture in the country will pay the duty, the government said July 13. TengizChevroil LLP was exempt from the earlier duty.

The reintroduction of the duty marks another step in the government’s campaign to boost its share of revenue from the country’s most valuable export. TengizChevroil and Karachaganak together accounted for about 45 percent of Kazakhstan’s 76.4 million tons of oil output last year.

Karachaganak Petroleum Operating said July 13 that it should be exempted from export duties because of “tax stabilization provisions” within its production sharing agreement.

Source: Businessweek.com