Sauat Mynbayev, Chairman of KazMunaiGas (KMG), Kazakhstan's national oil and gas company, believes that shipment of Kazakhstan's crude oil to China for processing is made unfeasible, with the availability of duty-free supplies from Russia, Tengrinews reports.
Under the Kazakh-Chinese tolling agreement Kazakhstan was supplying crude to China for processing, paying for the reefing and getting the finish petroleum products from China in return.
"Some amount of tolling operations has been effected. I don't think it was a large amount, but KMG is not directly responsible for conducting these operations. However, with the agreements that we achieved with Russia in the end of last year, I don’t see any economic sense in continuing the tolling," Mynbayev said at the press-briefing at the Central Communications Service.
The tolling was a necessity in 2012-2013, when Kazakhstan was importing petroleum products from Russia and supplying compensation crude oil to Russia in return. It was like importing oil products with Russian export tax on them, the KMG Chairman explained. But later Kazakhstan and Russia agreed to zero out the oil balance starting from January 1, 2014 (Kazakhstan supplies 0 oil to Russia and Russian supplies 0 oil to Kazakhstan).
"We have a zero balance of our mutual supplies, but we are transiting oil through Russia and Russia is transiting its oil via Kazakhstan in the amount of 7 million tons to China. After the zeroed out the oil balance and agreed about the tax free deliveries of petroleum products (from Russia), the tolling operations (with China) became unfeasible, both for individual companies and for Kazakhstan in general. It is easier to bring the same amount of light oil products from Russia," he added.
Earlier, the Oil and Gas Ministry of Kazakhstan said that it was planning to export 200 thousand tons of oil from Kazakhstan to China in 2014 in the form of tolling. 338,919 tons of Kazakhstan's crude oil was refined at Chinese plants in 2012-2013. And 150,143 tons of high-octane petrol were imported back to Kazakhstan in 2012-2013.
By Renat Tashkinbayev
Sauat Mynbayev, Chairman of KazMunaiGas (KMG), Kazakhstan's national oil and gas company, believes that shipment of Kazakhstan's crude oil to China for processing is made unfeasible, with the availability of duty-free supplies from Russia, Tengrinews reports.
Under the Kazakh-Chinese tolling agreement Kazakhstan was supplying crude to China for processing, paying for the reefing and getting the finish petroleum products from China in return.
"Some amount of tolling operations has been effected. I don't think it was a large amount, but KMG is not directly responsible for conducting these operations. However, with the agreements that we achieved with Russia in the end of last year, I don’t see any economic sense in continuing the tolling," Mynbayev said at the press-briefing at the Central Communications Service.
The tolling was a necessity in 2012-2013, when Kazakhstan was importing petroleum products from Russia and supplying compensation crude oil to Russia in return. It was like importing oil products with Russian export tax on them, the KMG Chairman explained. But later Kazakhstan and Russia agreed to zero out the oil balance starting from January 1, 2014 (Kazakhstan supplies 0 oil to Russia and Russian supplies 0 oil to Kazakhstan).
"We have a zero balance of our mutual supplies, but we are transiting oil through Russia and Russia is transiting its oil via Kazakhstan in the amount of 7 million tons to China. After the zeroed out the oil balance and agreed about the tax free deliveries of petroleum products (from Russia), the tolling operations (with China) became unfeasible, both for individual companies and for Kazakhstan in general. It is easier to bring the same amount of light oil products from Russia," he added.
Earlier, the Oil and Gas Ministry of Kazakhstan said that it was planning to export 200 thousand tons of oil from Kazakhstan to China in 2014 in the form of tolling. 338,919 tons of Kazakhstan's crude oil was refined at Chinese plants in 2012-2013. And 150,143 tons of high-octane petrol were imported back to Kazakhstan in 2012-2013.
By Renat Tashkinbayev
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