Associated Press: Report: Accounts of Caspian Company Frozen

© 2006 The Associated Press

MOSCOW — The accounts of a pipeline company in which Chevron is one of the largest shareholders have been frozen in connection with 4.7 billion rubles (US$175 million; euro139 million) the company allegedly owes in back taxes, a newspaper reported Wednesday.

The Kommersant business newspaper cited unidentified sources close to the company as saying that federal tax authorities claim the company underpaid its taxes in 2002-03.

Chevron Corp. is the biggest oil company involved in the Caspian Pipeline Consortium, with a 15 percent stake. The governments of Russia and Kazakhstan have the largest interest with 24 percent and 19 percent respectively. Other shareholders include Exxon Mobil Corp., Royal Dutch Shell PLC, and Russia’s OAO Lukoil.

The 1,510-kilometer (940-mile) pipeline connects oil fields in western Kazakhstan with the Russian Black Sea port of Novorossiisk and is the only pipeline to run through Russia that is not controlled by the national monopoly OAO Transneft.

Russia and Kazakhstan have long been at loggerheads over plans to double the pipeline’s capacity to 1.34 million barrels per day. The expansion is vital for Kazakhstan to increase its oil exports to some 3 million barrels per day in the next decade, while Russia has resisted the move, which would put millions of tons of oil in competition with Russian oil for the limited number of tankers allowed from Novorossiisk through the overcrowded Bosporus.

Kommersant suggested that the tax claims served the interests of Transneft, which is reportedly being considered to manage Russia’s stake. Transneft spokesman Sergei Grigoriev called that “absurd” and told The Associated Press the company knew nothing about the reported tax claims.

However, he said the CPC should not be expanded unless alternative routes to get oil to market were developed in parallel _ specifically a Russian, Greek and Bulgarian project to build a pipeline from the Bulgarian port of Burgas on the Black Sea to the Greek port of Alexandroupoli on the Aegean.

A spokeswoman for ABN Amro bank, which Kommersant said holds the CPC accounts, said the bank had no comment. Representatives of the Federal Tax Service and the pipeline consortium said they were not immediately able to comment.

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