Astana, 11 November. The Main Transport Prosecutor’s Office found violations of tax law in the transportation of oil through the Kenkiyak–Kumkol and Atasu–Alashankou trunk pipelines: surpluses of oil that arise from technological features and measurement errors were not fully reflected in accounting, the prosecutor’s office said.
Because of this, it said, assets and tax liabilities were understated. After the prosecutors’ submission, the Energy Ministry and other state bodies took measures. An inventory put more than 92,000 tonnes of oil on the books, tax reports were adjusted and 2.9 billion tenge of corporate income tax was assessed. A further 300 million tenge or more in property tax, including penalties, was paid into the budget. Outlets give the total differently: more than 3.2 billion tenge in some, more than 3.3 billion tenge in others; both figures result from adding the assessed tax and the property tax receipts. The prosecutors stressed that work to ensure legality in trunk pipeline transport continues.
Which company committed the violations is not named in the account of the statement. Both pipelines belong to Kazakhstan-China Pipeline LLP, a joint venture of KazTransOil and China National Oil and Gas Exploration and Development Company, each holding 50%. The prosecutors do not name this venture, and the statement does not say it was the one checked.
What it means: This is not about oil without documents, as some headlines present the statement, but about how surpluses are accounted for. When oil is pumped through a pipe, measured volumes diverge, and the difference has to be put on the balance sheet and therefore taxed. The prosecutors’ statement does not mention theft.
Background: The 965.1 km Atasu–Alashankou and 794.26 km Kenkiyak–Kumkol pipelines are part of the Kazakhstan-China pipeline system. The first was launched in 2006, the second in 2009. The Kenkiyak–Kumkol capacity is 10 million tonnes of oil a year; KazMunayGas and CNPC plan to raise it to 20 million tonnes.
