Kazakhstan mulls halving crude export duty21 march 2015, 16:44
In the wake of dropping oil prices, the crude export duty rate in Kazakhstan, according to Halyk Finance analytics, could be reduced by half, Tengrinews reports.
Earlier, the Minister of National Economy Yerbolat Dossayev mentioned plans to lower the crude export duty rate from $80 per ton. The export duty rate was set to $80 based on much higher oil price and is not longer relevant.
The export duty applies to all oil companies except the companies operating under Production Sharing Agreements (PSA) with flat taxation.
According to Maryam Zhumadil of Halyk Finance company, the current export duty was set when oil was sold for $105-110 p/b. “We believe that abolishment of the export duty, like it happened in 2009 when the oil price was $57 p/b, is highly unlikely. We expect the export duty to be reduced to $40 per ton. This would correspond with the drop in the price for oil from mid 2014,” Zhumadil said.
The halving of the export duty should positively affect public oil companies working in Kazakhstan. “Among companies we work with, KazMunaiGas (Kazakhstan's national oil and gas company) would benefit the most from the decrease in the export duty. According to our estimates, the company is expected to export 60% of oil it produces in 2015,” Zhumadil said.
KASE-listed Nostrum Oil&Gas will also benefit from the reduction of the export duty. According to the analytics, the company had been paying export duties since 2013 despite working under a PSA.
Smaller exploration companies would not be seriously affected by the decrease of the crude export duty rate, as they mostly sell oil inside Kazakhstan.
Reporting by Azhar Azhirova, writing by Gyuzel Kamalova, editing by Tatyana Kuzmina