KZBlog

One week after the Address to the People of Kazakhstan, the Prime Minister announced that this year Kazakhstan will investigate all existing contracts with foreigners in the area of resource-exploitation i.e. mining and oil and gas. The government will void all contracts with companies that have violated the terms and the resources or rights to access will return to the State.

“Your instruction to return fields held by unscrupulous natural resource users to the state will be fulfilled during the course of this year,” Mr Massimov told a government meeting chaired by Mr Nazarbayev.

Furthermore no new contracts will be signed until a new tax code is passed.
Some view this as a chance to correct errors made in the early days of independence when foreign companies took advantage of Kazakhstan’s inexperience. Others see it as an excuse to nationalize more industries and keep more profit in Kazakhstan, or possibly consolidate more profit in certain individuals’ hands.

Most interestingly, of the 834 licenses for exploitation to be investigated, the government expects to find half of them in violation according to the Financial Times article. Does that mean decisions have already been made? Does the government already have a list of violations but has yet to enforce them?

The President announced the need for both a new tax code and for the state to have more control in natural resource industries in his address last Wednesday.