Kazak Prime Minister Kasymzhomart Tokayev blasted international oil companies developing the giant Karachaganak oil and natural gas field on April 3rd for not using enough local contractors.
“Let me tell you straight, Mr. Morrow – we’re not happy with the situation at Karachaganak,” an uncharacteristically blunt Tokayev told John Morrow, general director of the KIO consortium developing the field.
Tokayev added that: “We have come a long way by air and by road, and we can dispense with diplomatic niceties.” He said that investors were demonstrating a “scornful attitude to Kazakstan” by importing items that could easily be obtained in the country, including overalls for the KIO workers.
Deputy Prime Minister Danial Akhmetov had complained in March that KIO was importing sand, gravel and cement.
KIO, comprised of Agip with a 32.5 percent stake, Texaco with 20 percent, BG with 32.5 percent and LUKoil with 15 percent, had invested a total of $2.26 billion in the field by the end of 2000, of which only $280 million was spent on local goods and services.
Under an agreement between the government and KIO, Kazak participation in the project must equal at least 40 percent, while officials estimate the current level to be about 21 percent.
Tokayev said that Akhmetov would head a special commission “to investigate what is really happening” in Karachaganak, while Morrow promised that KIO would boost Kazak involvement to the agreed level.
Karachaganak has 500 billion cubic meters of estimated reserves of gas and 300 million tonnes of oil and gas condensate.
Morrow indicated that increased investments in 2001 and 2002 would go towards the construction of a pipeline from the field to Kazakstan’s oil capital Atyrau, where it would be linked to the Caspian Pipeline Consortium line to the Russian Black Sea port of Novorossiisk.
© 2001 Mena Report (www.menareport.com)