Shell to stay in Kazakhstan - foreign minister

ASTANA. March 18 (Interfax) - Reports that Shell (SPB: RDS.A) is planning to exit Kazakhstan have not been confirmed, and the company will continue operating in the country, Kazakh Foreign Minister Yermek Kosherbayev said.

"Shell is operating here, as you know. Yes, there are certain points of contention, but claims that the company is leaving Kazakhstan have proven unfounded," Kosherbayev said in the Majilis, the lower house of parliament, on Wednesday.

"When I was in the United Kingdom, British officials assured us that Shell will remain, and we will continue our cooperation," he said.

During the meeting in the Majliis, Kosherbayev presented to lawmakers a draft law on the ratification of the agreement on strategic partnership and cooperation between Kazakhstan and the United Kingdom.

"The agreement opens up additional opportunities for expanding cooperation in the oil and gas sector," he said.

Shell holds stakes in several projects in Kazakhstan, including production sharing agreements on the North Caspian project (16.81%) and the Karachaganak project (29.25%), and the Caspian Pipeline Consortium (7.4%).

In February, Shell CEO Wael Sawan said the company was putting new investment in Kazakhstan on hold due to a lack of alignment between joint venture partners and the government on key issues. The statement came after a Stockholm arbitration tribunal issued an interim ruling in a dispute between Kazakhstan and the shareholders of the Karachaganak field's operating company, ordering compensation of $2 billion to $4 billion to the state.

Later, commenting on Sawan's statement, Kazakh Energy Minister Yerlan Akkenzhenov said that, in fact, Shell wishes to continue developing in Kazakhstan. He added that he doubted foreign companies would leave the country, noting that their investments "are paying off handsomely."