Will US Bribery Scandal Harm Kazakstan?
Will US Bribery Scandal Harm Kazakstan?
The admission by the United States company Baker Hughes that staff bribed officials at the Kazak national oil and gas company could be bad for Kazakstan’s reputation, according to some NBCentralAsia commentators.
On April 26, Baker Hughes, an oil services company, pleaded guilty to charges that over four million US dollars were paid in bribes to officials at Kazakhoil – since renamed KazMunaiGaz – to secure contracts at the Karachaganak gas deposit in northern Kazakstan, according to Radio Free Europe/Radio Liberty.
The Houston federal court ordered Baker Hughes to pay a fine of 44 million dollars, the largest penalty of its kind in US legal history.
Baker Hughes is one of the world’s top three oil and gas service providers.
This is the second trial relating to Kazakstan’s energy sector that has taken place under US anti-corruption laws.
James Giffen, a US national who served as advisor to President Nursultan Nazarbaev, has been on trial since 2005 on charges that he paid bribes of 78 million dollars to senior Kazak officials to secure hydrocarbon extraction rights on preferential terms.
No one from KazMunaiGaz was available to comment on the case to NBCentralAsia.
NBCentralAsia commentators say the latest case could harm Kazakstan’s investment prospects as well as its political reputation.
“Precedents like this create a negative image of Kazakstan in the eyes of the world community, and this may affect the republic’s economic development, its trade ties, and on political matters,” said political scientist Oleg Sidorov.
“This case will ring warning bells with other companies, which could cite corruption among state officials [as a reason not to invest].”
Analyst Petr Svoik takes a different view – even though this was a high-profile case in which a Kazak state company was cited, he doubts it will have any serious impact on investment in the oil and gas sector.
“Scandals like this won’t have any effect on the attractiveness of investing in Kazakstan,” he said. “It’s been a long-established practice to pay off certain individuals in order to gain entry to the oil sector.”
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On April 26, Baker Hughes, an oil services company, pleaded guilty to charges that over four million US dollars were paid in bribes to officials at Kazakhoil – since renamed KazMunaiGaz – to secure contracts at the Karachaganak gas deposit in northern Kazakstan, according to Radio Free Europe/Radio Liberty.
The Houston federal court ordered Baker Hughes to pay a fine of 44 million dollars, the largest penalty of its kind in US legal history.
Baker Hughes is one of the world’s top three oil and gas service providers.
This is the second trial relating to Kazakstan’s energy sector that has taken place under US anti-corruption laws.
James Giffen, a US national who served as advisor to President Nursultan Nazarbaev, has been on trial since 2005 on charges that he paid bribes of 78 million dollars to senior Kazak officials to secure hydrocarbon extraction rights on preferential terms.
No one from KazMunaiGaz was available to comment on the case to NBCentralAsia.
NBCentralAsia commentators say the latest case could harm Kazakstan’s investment prospects as well as its political reputation.
“Precedents like this create a negative image of Kazakstan in the eyes of the world community, and this may affect the republic’s economic development, its trade ties, and on political matters,” said political scientist Oleg Sidorov.
“This case will ring warning bells with other companies, which could cite corruption among state officials [as a reason not to invest].”
Analyst Petr Svoik takes a different view – even though this was a high-profile case in which a Kazak state company was cited, he doubts it will have any serious impact on investment in the oil and gas sector.
“Scandals like this won’t have any effect on the attractiveness of investing in Kazakstan,” he said. “It’s been a long-established practice to pay off certain individuals in order to gain entry to the oil sector.”
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
