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. Last Updated: 07/27/2016

Chevron a Target of Kazakh Ire

ALMATY, Kazakhstan — By the standards of authoritarian post-Soviet republics, it was a bit of an eye-opener: An illustration in a newspaper here depicted the prime minister, the energy minister, his deputy and the head of the state oil company all smiling as they carried a big length of oil pipe emblazoned with Chevron's logo.

The theme of the illustration — that Chevron has close, deep ties to the Kazakh leadership and wields immense influence — would certainly not have come as a surprise.

Chevron is a major oil producer here and has been one of Kazakhstan's most valued foreign investors since the early days of independence. The president of Chevron's Eurasia unit, Guy Hollingsworth, says its relations with the government are "excellent."

But the illustration, in a country not famous for its political humor, is an indication that the climate in Kazakhstan is changing. The big oil companies are starting to be portrayed in the media here — sometimes jokingly, sometimes not — as exploiters of Kazakhstan.

Chevron is the fattest target. Chevron owns half of Tengizchevroil, the venture set up in 1993 to operate the Tengiz oil field in western Kazakhstan, with recoverable reserves of 6 billion to 9 billion barrels and $1 billion in investment so far. Tengizchevroil, which employs more than 3,200 people and will spend $250 million this year on local goods and services, is held up as a model for other foreign investors, and it is widely seen as synonymous with Chevron to the chagrin of the other commercial partners in the venture — ExxonMobil with 25 percent and Lukoil of Russia with 5 percent. (Kazakhoil owns the rest.)

A new generation of Kazakh business leaders has arisen in recent years that feels less beholden to Chevron. Companies like Kaztransoil, the national oil transportation company run by President Nursultan Nazarbayev's son-in-law, as well as local banks and pension funds are starting to amass enough capital to consider stepping into foreign investors' shoes.

A great deal of this money is aimed at oil ventures, with the result that foreign investors can find themselves in the locals' cross hairs. Hurricane Hydrocarbons, a modest-size Canadian company with an oil field and refinery in southern Kazakhstan, has been maligned in the news media here, which analysts attribute to local business interests that want to push the company out. "Those who control the oil business also control the mass media," Askarov said.

But Chevron is seen as largely immune to such pressures because of its size and influence. "Chevron is one of the main shareholders in the 'corporation' that is called the state of Kazakhstan," said Pyotr Svoik, who is co-chairman of Azamat, an opposition political party.

Still, Svoik believes that many average people here have come to resent Chevron and other foreign oil companies, a factor that may one day turn into a liability for both Chevron and the government.