Kazakhstan wants better terms for oil production sharing agreements

Kazakh President Kassym Jomart Tokayev ordered the government on Tuesday to intensify talks with international oil giants about an extension existing Production Sharing Agreements (PSA) at "better conditions".

Central Asia is one of the top 10 oil producing countries in the world. It has a chequered past when it comes to international oil companies. They have been sued for billions of dollars.

The government, according to foreign companies, is only seeking to increase the share of its oil and gas projects. This "resource nationalism" they call it.

Kazakhstani authorities rejected this criticism, saying that their goal was to reduce costs by Western companies.

"Large investment requires a long-term plan." Tokayev stated that the government would have to intensify the negotiations to extend PSA contracts at updated, favorable terms for the country.

Kazakhstan's oil production is largely derived from the Tengiz oilfields and its Karachaganak, Kashagan, which were developed by international oil companies.

It launched claims in 2023 against groups that were developing the Kashagan oilfields and Karachaganak, for more than $13 Billion and $3.5 Billion, respectively, on disputed costs.

Eni, Shell, TotalEnergies, ExxonMobil. KazMunayGaz. Inpex. CNPC are developing the offshore Kashagan Field, which is one of the biggest discoveries made in recent decades.

The North Caspian Operating Company, or NCOC, has invested around $50 billion into the project.

Eni, Shell, KazMunayGaz, Chevron, and Russia's Lukoil are also partners at Karachaganak with investments totaling more than $27 Billion.

Tengizchevroil is Kazakhstan's biggest oil producer. It includes Chevron ExxonMobil Lukoil KazMunayGaz. (Reporting and writing by Mariya Goreyeva, editing by Kirovan Donovan and Jason Neely; written by Vladimir Soldatkin)

(source: Reuters)