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. Last Updated: 07/27/2016

Kazakhs Alter Contracts Law

ASTANA, Kazakhstan -- Kazakh lawmakers on Wednesday allowed their government to change or break contracts with foreign companies, in a move that will alarm already jittery investors in the country.

Kazakhstan dealt a heavy blow to business confidence last month when it stopped operations at the Kashagan oil field, run by an Eni-led consortium, raising fears of resource nationalism there.

The unanimous vote in the lower house of the parliament piles further pressure on Italy's Eni as talks over Kashagan enter their final and crucial stage ahead of an Oct. 22 deadline.

The law, voted in without a public debate in the chamber, will come into force once passed by the upper house and signed by President Nursultan Nazarbayev. Under the law, the oil-rich state could force retrospective changes to any contracts or break their terms altogether with foreign and domestic companies, if it deemed a threat existed to the country's national security.

"This draft law aims to strengthen the national interests of our country in the sphere of natural resources," said Yerlan Nigmatulin, a member of the parliament who has spearheaded the law. "I think only dishonest companies that break our country's legislation will feel uncomfortable with regard to this law."

Kazakhstan's newfound assertiveness in the oil sector echoes Russia's feud with Shell over Sakhalin-2.

Although Kazakhstan has said the Kashagan case is an isolated one, Nigmatulin praised Russia's approach.

"It's standard practice in the world," he said. "Russia took a very firm stance on Sakhalin. I think its stance was correct."