Dedication across the board
Annual Report 2012

Consolidated Financial Statements

15. Due to government of Kazakhstan

The amount due to Government of the Republic of Kazakhstan has been recorded to reflect the present value of a liability in relation to the expenditures made by the Government in the time period prior to signing the Contract that were related to exploration of the Contract territory and the construction of surface facilities in fields discovered therein and that are reimbursable by the Group to the Government during the production period. The total amount of liability due to Government as stipulated by the Contract is US$ 25,000 thousand.

Repayment of this liability commenced in 2008 with the first payment of US$ 1,030 thousand in March 2008 and with further payments by equal quarterly instalments of US$ 258 thousand until May 26, 2031. The liability was discounted at 13%.

The balances as at December 31, and changes in the amount due to Government of Kazakhstan for the year were as follows:

In thousands of US dollar 2012 2011
Due to Government of Kazakhstan as at January 1 7,242 7,321
Unwinding of discount 942 954
Paid during the year (1,031) (1,033)
  7,153 7,242
Less: current portion of due to Government of Kazakhstan (1,031) (1,031)
Due to Government of Kazakhstan at December 31 6,122 6,211