15 Jul 2010 17:10

Tengizchevroil under prosecution, accused of illegal oil production

ASTANA. July 15 (Interfax) - Kazakhstan's State Agency for the Prevention of Economic Crime and Corruption has launched criminal proceedings against the Tengizchevroil (TCO) oil company, accusing it of "illegal enterprise involving a particularly high revenue," an agency spokesman said on Thursday.

According to an investigation report received by the agency from the Prosecutor General's Office, TCO, which is developing the Tengiz and Korolevskoye oil and gas fields in the western Kazakh region of Atyrau, has illegally produced oil amounting to a total of 212.4 billion tenge ($1.4 billion), the spokesman, Murat Zhumanbai, said at a briefing in the Kazakh capital of Astana.

The criminal proceedings started on July 12.

"It has been established that, in the Tengiz field, TCO has drilled 41 wells deeper than the established mark of 5,100 meters. From September 1, 2002, to July 1, 2010, TCO produced more than 3.4 million tonnes of oil from 10 wells above the limits set by the license," Zhumanbai said.

Earlier, the Kazakh Oil and Gas Ministry accused TCO of departing from contractual terms and reported the company to the prosecution service.

TCO started production at Tengiz in 1994 under a 1993 agreement between Chevron and Kazakhstan.

The company is owned by Chevron, which has a 50% stake in it, ExxonMobil which has a 25% stake, the Kazakh national oil and gas company KazMunaiGas with a 20% stake, and Russian-U.S. venture LUKArco with a 5% stake.