In Kazakhstan, Saving the State Oil Company May Devastate the Sector

The minority shareholders of Kazakhstan's lucrative energy firm, KazMunaiGas Exploration and Production (KMG EP), will vote Aug. 3 on whether or not to sell their shares to the firm's parent company, effectively consolidating the two. The parent company, KazMunaiGas (KMG), is fully owned by the state and is involved in some capacity in most of the country's major energy projects, including Kazakhstan's largest oil fields, transportation firms, refineries and sales groups. In 2004, the Kazakh government established KMG EP to act as a separate exploration and production company. KMG currently owns 57 percent of it, but KMG EP has been fairly autonomous since its foundation, a fact that has at times put the two at odds....