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. Last Updated: 07/27/2016

Kazakhs Drop Chevron Tengiz Probe

ASTANA, Kazakhstan -- Kazakhstan's Ecology Ministry said Wednesday that it had dropped claims against the Chevron-led firms operating a large oil field after the group pledged $300 million per year for environmental protection.

TengizChevroil, or TCO, produces one-fifth of the country's oil output from the huge Tengiz oil field in western Kazakhstan but has periodically faced accusations from the government over its environmental record.

"We have managed to solve completely all of our problems," Kazakh Ecology Minister Nurlan Iskakov told reporters in the capital, Astana. "TengizChevroil completely recognized all of our claims."

In February, Iskakov threatened the joint venture with the suspension of its license if it did not produce a plan to deal with its vast stocks of sulfur within a month.

Oil from the field has a high sulfur content, which is removed from the crude and stockpiled in huge yellow slabs the size of several football pitches near the oil wells.

TCO has said in the past that the sulfur is harmless and it has a program to sell off the byproduct gradually.

Iskakov said that the ministry's change of heart came after pledges of increased environmental spending from TCO.

"Our complaint is that for every ton of oil that they produce, they spend just 1.3 tenge [$0.01]," he said.

"Now we have signed and agreed on a plan presented to us, under which environmental protection spending under our criteria and meeting our complaints will be 110 billion tenge ($880 million) from 2007 to 2009.

"Now they will be closely monitored," he added. "We'll watch every cent."

Chevron holds 50 percent in TCO, national oil firm KazMunaiGaz has 20 percent, ExxonMobil holds 25 percent and LUKoil has 5 percent.