The Act covers “the extraction of subsoil resources and the conduct of oil operations” and gives it “priority right to purchase a licence to extract subsoil resources and/or a stake in projects to extract natural resources, including hydrocarbons”. In short, the Kazakhstan government now has carte blanche to take over BG’s interest in the project.

As reported earlier in EnergyReview.net, the Kazakh government had been trying to buy BG’s interest but has been blocked from doing so by the other partners in the international consortium which is developing the offshore project.

Citing an anonymous “high-ranking representative from the energy and mineral resources ministry”, Interfax stated, “The parliament today adopted a fundamental legal provision on giving the state a priority in cases when stakes in projects to develop natural resources are to be sold. This means Kazakhstan now has all legal grounds to be the first to claim BG’s stake in the major Kashagan oil project.”

“We used to tell foreign investors that Kazakhstan is the owner of all the deposits on its territory in any case, and we as the state have all the legal and, if you like, the moral right to be the first to claim stakes in the project to extract natural resources in cases when a decision on selling them is taken. Now we have all the legal grounds to settle the matter to our benefit,” added the insider.

In a statement the ministry said, “The adoption of the amendment in no way means that the state intends to purchase stakes in all major extraction projects by using any method, including pressure. This only means that if one wants to sell one’s stake in some or other project to extract natural resources, then be so kind as to offer it to the state first and only then to other stakeholders.”