Thursday, July 15, 2010

Chevron (NYSE:CVX), Exxon (NYSE:XOM), Investigated in Kazakhstan

In what some believe is an attempt to extract concessions out of Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) by government officials in Kazakhstan, the two companies are undergoing an investigation for allegedly exporting more oil than allowed under their contract.

What apparently is happening is Kazakhstan is looking to get a bigger piece of the profits, a practice other countries have done to oil companies once they have been producing there for some time.

A couple of years ago, Chevron, which is a 50 percent owner in the joint venture named Tengizchevroil LLP, made a major investment in new technology which increased the production to around 540,000 barrels a day. Exxon is a 25 percent partner in the venture.

This increase in production may have initiated the investigation, which is being labeled as a "criminal" investigation.

Also owning a piece of the joint venture is state-owned KazMunaiGas, with a 20 percent stake, and LukArco, a Russian company.

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