News 2015October 2015
Kazakhstan’s government is considering levying a penalty on a venture led by BG Group Plc and Eni SpA that operates the nation’s second-biggest producing oil and gas field as the state seeks extra revenue to bolster its finances, according to two people familiar with the plan. The fine on the Karachaganak project could be as much as $2 billion, one of the people said.
That would be roughly in line with penalties the government threatened to impose in a 2010 dispute that ended with the state taking a 10 percent stake in the project. The Central Asia nation is studying the possibility of imposing the fine because the companies haven’t fulfilled certain contractual obligations, the people said, asking not to be identified because the matter isn’t public.
The penalty may be a precursor to the government increasing its stake in Karachaganak, they said. Kazakhstan, which depends on energy products for about three quarters of its exports, needs additional funds to balance its budget after the collapse in crude oil reduced state revenue and weakened the currency by about 45 percent against the dollar since the beginning of last year. The government of President Nursultan Nazarbayev has in the past forced its oil company KazMunaiGas National Co. into projects to increase state control over operations.