News 2017February 2017
The shareholders of Karachaganak Petroleum Operating company prepare a proposal on equitable distribution of oil sales revenues for Kazakhstan, reports Trend. "During nine months, the KPO shareholders shall bring a proposal to the Government of Kazakhstan on a dispute about the unfair distribution of oil sales revenues at Karachaganak field," stipulates the statement. As noted, at the same time, Kazakhstan, represented by the Ministry of Energy, will continue to defend its interests through the arbitration.
"At the end of December we signed a memorandum on continuation of our negotiations in the next nine months of 2017. They will give us the concrete proposals," said Kanat Bozumbayev, Minister of Energy of the RoK . "We chose our arbitrator, and they did the same. Now we have to choose and approve the common one, " quotes the Agency based on the speech of the head of the Ministry of Energy.
In March of the last year, it became known that Kazakhstan demands the KPO Consortium to pay about 1.6 bln USD for the unfair interpretation of the Production Sharing Agreement (PSA), resulting in an uncompleted recovery of the oil sale profits by Kazakhstan from Karachaganak field. The claim amount was indicated in the financial report of Russian company Lukoil, one of the signatories of the PSA.
According to Financial Times, KPO has proposed to pay about 300 mln USD in June 2016 for settlement of the dispute. Kazakhstan rejected this proposal. In November, Kazakhstan filed a complaint to the arbitration, but at the same time it continues the negotiations with the Consortium. According to Kanat Bozumbaev, investors have already repaid their investments to Karachaganak field. "They agree with us partially and they disagree with us considerably: we are talking about billions of USD. We will maintain our position till the end.
We're not trying to change the PSA, we’re talking about the way the agreement is interpreted. If investors think otherwise, the truth should be found by the court. We can suspend the arbitration at some stage, if their proposals will be deemed as satisfactory for the country, "said the head of the Ministry of Energy. "Mostly all the investors, who came to Karachaganak at the very beginning, already repaid their investments and received a good profit," said the Minister.