Kazakhstan Mulling Changes in Oil Sector R&D Contributions - Expert
Photo: Elements.envato.com, ill. purposes
Kazakhstan may change the rules governing how oil companies contribute to research and development (R&D), Orda.kz reports.
According to oil and gas expert Nurlan Zhumagulov, authorities are considering redirecting these mandatory R&D payments — equivalent to 1% of capital expenditures — straight into the state budget. These payments amount to roughly 15 billion tenge annually. However, Zhumagulov noted that the system has failed to advance scientific research.
The requirement was introduced back in 2012, but we still haven’t managed to significantly advance scientific development in the oil sector. Most oil companies used the funds for their own purposes: for example, classifying seismic surveys as R&D or directing money to affiliated educational institutions. One of the few exceptions is the Center for BioEnergy Research, which successfully worked to improve oil recovery at fields like Zhalgyztobe, Tabynai, PetroKazakhstan Kumkol, Turgai, Karazhanbas, Ozen, and Aidan-Munay. The company now collaborates with NCOC (Kashagan) on a different focus,said Nurlan Zhumagulov
Nearly half of all R&D contributions come from KazMunayGas and QazaqGaz, with their payments funneled into the Samgau Fund under the Samruq-Qazyna National Welfare Fund. However, transparency remains an issue: companies like the CNPC consortium reportedly spend R&D funds through their subsidiaries without publicly disclosing how the money is used.
Apparently, due to the lack of tangible results, the government has decided to redirect these obligations into the state budget. But this is money from subsoil users, who are allowed to claim deductions with a 1.5 coefficient (the goal was to encourage scientific development: you spend 100, write off 150). It would make more sense to channel these R&D funds toward the socio-economic development of the regions where oil is being produced, said Nurlan Zhumagulov.
Concerns about the misuse of R&D funds are not new.
At the end of last year, American investor Dorin Baru told Orda.kz that R&D spending in Kazakhstan often amounts to a formality, with little actual research taking place.
"Most of the service contracts done under NIOCR have absolutely nothing to do with research. I would strongly challenge the anticorruption bodies in Kazakhstan to review all the completed works under NIOCR and at the same time have some investigation on how (at under which circumstances various service companies have secured the respective licenses to operate under NIOCR," Baru said.
Original Author: Nikita Drobny
Latest news
- From Driverless Trucks to Car Leasing: What Kazakhstan’s Government Discussed Today
- Kazakhstani Gets 3 Years for Fake Army Abuse Story
- Almaty Man Beaten After Being Mistaken for a Drug Courier
- PIN Code Parcel Pickup and Hybrid Mail: Kazakhstan Changes Postal Rules
- Kazakhstan Schools to Bring In Officers for New Constitution Classes
- Kazakhstanis Rescue Two Pelicans Exhausted by Extreme Heat
- 719 Million Tenge Tobol River Sand Mining Case Goes to Court
- Which Kazakh Product Is Finding New Buyers Abroad?
- Kazakhstan Seeks UNESCO Status for Mangystau Rock Mosques
- Fire Breaks Out in Almaty Region Mountains
- 19 Forest Fires Reported Across Kazakhstan’s Protected Areas
- Patient Fined for Threatening Kostanay Medical Worker
- Six Die from Gas Poisoning During Sewer Repairs in Pavlodar Region
- Kazakhstan Considers FIA Grade 1 Racetrack in Atyrau
- Drone Attacks Continue at CPC Terminal: Another Oil Tanker Hit
- Pension Savings Will No Longer Receive Inflation Compensation
- Kazakhstan to Expand Three Refineries and Build a New One
- Kazakhstan Resident Wins Court Battle Over Jennifer Lopez Ticket
- Kazakhstan Extinguishes Four Forest Fires as Heat Continues
- Kazakhstan Demands Action After Drone Attacks on Tankers Carrying Its Oil
