2016 EITI Report
Total Page:16
File Type:pdf, Size:1020Kb
0 The 12th National Report On implementation of the Extractive Industry Transparency Initiative in the Republic of Kazakhstan for 2016 The work is performed by “UHY SAPA Consulting” LLP in accordance with the contract on public procurement of services No.25 dated March 28, 2017 entered into with the RSI “The Republican Center of geological information “Kazgeoinform” of the Committee of geology and subsoil use of the Ministry of investment and development of the Republic of Kazakhstan. 1 CONTENT List of definitions and abbreviations 6 Report on the results of the implementation of the agreed-upon 9 procedures I. General information 12 1.1. Extractive Industries Transparency Initiative 12 1.2. EITI in the Republic of Kazakhstan 12 1.3. Data about participation of the companies 13 1.4. Reporting status on EITI 13 II. APPROACH TO DATA RECONCILIATION 14 2.1. Purpose 14 2.2. Scope of work 14 2.3. Approach to data reconciliation 14 III. EXTRACTIVE SECTOR OVERVIEW 19 3.1. The contribution and role of the extractive sector in the economy of 19 Kazakhstan Export 23 Investments 28 Employment 28 Informal sector 28 Gross domestic product 29 Income 29 3.2. Extractive industries: Key characteristics, regions, main players 33 Oil 40 Gas 51 Coal 58 Metals 61 Uranium 63 Lithium 65 Gold 66 Silver 67 Geological exploration 74 Transportation 79 3.3. Extractive industry management 90 3.3.1. Legal basis 90 Information on licenses and contracts 102 Disclosure of contracts 104 3.3.2. Fiscal mode 106 3.3.3. The role and participation of the government 110 3.3.4. Quasi-public sector 116 National companies and state-owned enterprises 116 3.3.5. Quasi-public sector: income and expenses 134 3.3.6. Revenue distribution and management from mining sectors 143 IV VERIFICATION OF ACCOUNTABLE PAYMENTS 155 4.1. Consolidated report on significant tax and non-tax 155 Payments/Revenues 4.1.1. Tax revenues 157 4.1.2. Income for the use of natural and other resources 189 4.1.3. Other non-tax revenues to the budget 202 4.1.4. Customs payments 215 4.2. Payments reflected in foreign currency (USD) 228 2 4.3. Total taxes and other obligatory payments to the budget 230 4.3.1. Tax payments to the budget from Payers of oil and gas sector 230 4.3.2. Tax payments to the budget from Payers of mining sector 230 4.4. The distribution of taxes and other obligatory payments in budgets 231 4.5. The level and percentage of unidentified discrepancy 232 4.6. Reconciliation for social investments 235 V RECOMMENDATIONS 236 LIST OF TABLES Table 1 List of payments and receipts to be reconciled 16 Table 2 Volumes and indices of industrial production by type of activity 22 Table 3 Export of certain goods to the Republic of Kazakhstan 24 Table 4 Accounts of the consolidated budget (state budget and National 31 Fund), 2013-2016 Table 5 Information on the amount of revenues to the consolidated budget 32 (SB+NF) for 2016. Table 6 Production volumes by types of minerals and by regions 33 Table 7 Precious metals prices 62 Table8 Transportation of oil by the marine fleet 81 Table9 The main gas pipelines of Kazakhstan 84 Table 10 Cargo turnover of public railway transport 86 Table 11 Transportation of freight by oblast 86 Table 12 Railway rolling stock 87 Table 13 Taxes of JSC “Kaztransoil” in 2016 89 Table 14 The distinction between activities of national companies in the 121 sphere of subsoil use Table 15 List of major subsidiaries and affiliates of JSC “NC “KMG” 131 proposed for transfer to the competitive environment as a priority Table 16 Budgetary loan granting and operations with fiscal assets in 138 general terms (billion KZT) Table 17 Report on revenues and use of RK NF РК for 2016 151 LIST OF FIGURES Figure 1 Main factors of tax revenue growth 30 Figure 2. Top 5 most profitable mining companies in Kazakhstan in 2015 31 Figure 3 Price per barrel of oil (Brent), USD 42 Figure4 Changes in oil prices by the corresponding period of the previous 42 year,% Figure5 Planned production volumes for 2017 and subsequent years 44 Figure6 Scenarios of the average annual volume of gas production in 54 Kazakhstan up to 2030 with a perspective up to 2050, billion m3 Figure 7 Forecast gas balance up to 2030 with a perspective up to 2050 55 (pragmatic scenario), billion Figure 8 Forecast of commodity gas transit, billion m3 57 Figure 9 Forecast of exports (+) / imports (-) of commodity gas (excluding 57 exchange transactions with OJSC “Gazprom”) according to domestic consumption scenarios, billion m3 Figure10 Interactive map of the of the Committee for Geology and Subsoil 71 Use Figure 11 Level of geological exploration by countries 74 Figure 12 A forecast of geological exploration costs for the period up to 74 2020. 3 Figure 13 Volumes of gas transportation through main gas pipelines 82 Figure 14 The scheme of the main gas pipelines of Kazakhstan 85 Figure 15 Basic functions of the Code 107 Figure 16 Subsoil users taxation improvement 108 Figure 17 The enquiry results of Kazakhstan largest companies’ CEO 110 Figure 18 Evaluation of government work efficiency 111 Figure 19 The quasi-public sector entities 117 Figure 20 Indicators of portfolio companies 118 Figure 21 Top 10 subsidiaries of JSC “NWF “Samruk-Kazyna” 118 Figure 22 The rating of transparency of large national companies 120 Figure 23 The rating of transparency of national companies 120 Figure 24 The structure of JSC “NC “KMG” subsidiaries ownership 123 Figure 25 The structure of JSC “KazTransGas” subsidiaries ownership 124 Figure 26 The statistics for the privatization of national holdings assets and 130 national companies within the framework of a Comprehensive plan for 20.06.2017 Figure 27 Scheme of dividend payout to Central Government Budget in 2016 132 Figure 28 Subjects of state sector 135 Figure 29 State functions 141 Figure 30 Central Government budget size, 2013-2018, billion KZT 144 Figure 31 State budget income, 2013-2018, billion KZT 145 Figure 32 Equity proportion of tax revenues of Central Government budget 146 in 2016. Figure 33 Transfer income to Central Government budget, 2013-2018, 147 billion KZT. Figure 34 Equity proportion of Central Government budget outcomes, 2016 149 ATTACHMENTS Attachments 1-3 Report form on Payments/receipts, carried out in foreign currency Attachments 1-4 Consolidated form of the report on tax and non-tax receipts in cash for each taxpayer of the mining sector in 2016 Attachments 1-5 Consolidated report on substantial tax and non-tax Payments/Receipts in cash for each Payer of the subsurface use sector for 2016 Attachments 1-6 Consolidated report on substantial tax and non-tax Payments/Receipts of the oil and gas and mining sectors’ Payers in the Republic of Kazakhstan for 2016 Attachments 2-2 Summary report on payments/receipts on the state shares in property Attachments 3-2 Summary report on expenses on social development and local infrastructure, except for the funds transferred on BCC 206114 Attachment 5 Funds allocated for treatment facilities, monitoring of pollution of a subsoil, the social sphere and training of experts on the basis of the reporting under the LCC forms Attachment 7 Transportation information on JSC “KazTransOil”, JSC “KazTransGaz” and JSC NC“Kazakhstan temir zholy”for 2016. Attachment 9 Informationon Local content in the procurement of 4 goods, works and services for 2016, ois ectors’ subsurface users Attachment 10 List of subsurface useand mining companies Attachment 11 Statement of significance Attachment 12 Supporting documentation Attachment 13 Information on clarified and not clarified Discrepancy on Annex 3-2 “Summary report expenditure on social development and local infrastructure, with the exception of the funds listed on the BCC 206114” for 2016. http://eiti.geology.gov.kz/ru/national-reports 5 List of definitions and abbreviations EITI Extractive Industries Transparency Initiative BP British Petroleum CRIRSCO Committee for Mineral Reserves International Reporting Standards ERG Eurasian Resources Group S.a.r.l. company (“ERG”) JSC Joint Stock company KASE Kazakhstan Stock Exchance LSE London Stock Exchange NCOC NCOC N.V. North Caspian Operating Company LTD Limited PwC PricewaterhouseCoopers AGMP The Association of Mining and Metallurgical Enterprises AG KIPR Analytical group KIPR JSC “UAPF” Joint Stock Company “Unified Accumulative Pension Fund” JSC “EEC” JSC “Eurasian energy Corporation” JSC “NAC “Kazatomprom” JSC “National Atomic Company “Kazatomprom” JSC “NBRK” JSC “National Bank of the Republic of Kazakhstan” JSC “NEC “Kazgeology” JSC “National exploration Company “Kazgeology” JSC “NMC “Tau-Кen Samruk” JSC “National Mining Company “Tau-Кen Samruk” JSC “NC “KazMunayGas” JSC “National Company “KazMunayGas” JSC “NMH “Baiterek” JSC “Baiterek” National Management Holding” JSC “KMG” EP” JSC “KazMunayGas” Exploration Production” JSC SWF “Samruk-Kazyna” Sovereign Wealth Fund “Samruk-Kazyna” JSC “SSGPO” JSC “Sokolovsko-Sarbaiskoe gorno- obogatitelnoe proizvodstvennoe obedinenie” JSC “CNPC- AktobeMunayGas JSC “China National Petroleum Corporation– AktobeMunayGas” NPS Nuclear power station LLP APMP LLP Aktau Plastic Mass Plant BIN Business identification number BO Beneficial ownership GDP Gross domestic product MMC Mining and metallurgical complex MP Mining plant SDPS State District Power Station SE State enterprise MC Mining company GE Geologicalexploration SI State institution 6 EAEU Eurasian Economic Union USMSS Unified state management system subsoil EU European Union IIS USMSS RK Integrated Information System “Unified State Management System Subsoil of Republic of Kazakhstan” IIT Individual income tax NMH National managing holding BCC Budget classification code SRC State revenue Committee KIOG Kazakh Institute of oil and gas KIDI Kazakhstan industry development Institute KMT Limited Liability Partnership “Offshore Oil Company “KazMunayTeniz” KMG JSC “National Company “KazMunayGas” KPO Karachaganak Petroleum Operating B.V.