Kazakhstan demands majority stake in all new pipelines

The government of Kazakhstan has passed an ambitious piece of new legislation that entitles the state to a majority stake in all new oil and gas pipelines constructed in the region. The country’s Oil and Gas minister, Sauat Mynbayev said, “The state must have at least 51% in any new pipelines.”

The bill has been passed in time to coincide with the development of the Kashagan oil field, the largest oil discovery in the last 40 years, and the new pipelines that will be built for it. The only step remaining before the bill enters into law is for it to be signed by the country’s president, Nursultan Nazarbayev.

Mynbayev confirmed the timing of the law and its link to the Kashagan project when he said, “If we talk about the second phase of implementing the Kashagan project … it goes without saying that the Yeskene-Kuryk pipeline would be built already in line with the new law.

Kazakhstan plans to use the enormous 9 billion bbl Kashagan field to fuel a rise in oil production of 60% by the end of this decade, up from a 2011 figure of 80 million t. Production is set to begin at the field by the end of 2012 or early 2013 with an estimated initial output of 370 000 bpd followed by a rise to 450 000 bpd.

Many states such as Kazakhstan have become increasingly assertive in their dealings with oil and gas projects; largely because they find themselves in a position of power as companies scramble to obtain access to hydrocarbon reserves in the face of resource decline and growing global demand.

Edited from various sources by David Bizley

Read the article online at: https://www.worldpipelines.com/business-news/15062012/kazakhstan_demands_majority_stake_in_all_new_pipelines/