Kazakh authorities suspect an oil venture led by U.S. major Chevron of extracting $1.4 billion worth of oil above the level agreed with the government, a spokesman for the country's financial police said Thursday. Murat Zhumanbai, spokesman for the Agency for Fighting Corruption and Economic Crime, said the suspicions related to alleged production by the TengizChevroil venture. No criminal case has been launched. The agency "has received materials from the prosecutor general on the inspection of TengizChevroil's activities and illegal production of oil worth 212 billion tenge [$1.4 billion]," he said. "A decision will be taken in due course, after an investigation." A spokeswoman for Chevron in Moscow referred questions to a TengizChevroil official in Kazakhstan. Two officials for the joint venture were not immediately reachable for comment. U.S.-based spokespeople for Chevron were not immediately available for comment.
Chevron owns 50 percent of the venture. Another U.S. major, ExxonMobil, holds 25 percent and Kazakh state oil and gas firm KazMunaiGaz owns 20 percent. LUKoil, Russia's largest private oil producer, controls the remaining 5 percent. Kazakhstan, Central Asia's largest economy and oil producer, has attracted more than $100 billion in foreign investment since gaining independence two decades ago, much of it in the natural resources sector. In recent years, Western energy firms have come under increasing pressure from the state as government firms look to raise their influence in the sector. State acquisitions have often followed campaigns in which the government has accused companies of environmental or tax violations, or of breaking the terms of their contracts.
Oil and Gas Minister Sauat Mynbayev said June 21 that he suspected the TengizChevroil venture had produced "significant volumes" of crude above the levels specified by its license agreement. In March, the financial police accused the Karachaganak gas project of illegally earning $708 million in 2008 by producing more oil and gas than originally agreed. KazMunaiGaz subsequently approached the consortium that owns the project, led by BG and Eni, with a proposal to acquire 10 percent in the project.
