ALMATY (AFX-ASIA) – Kazakhstan’s lower house of parliament has approved new oil export taxes likely to be seen as an extra squeeze on foreign investors considering new projects in the country, media in the ex-Soviet republic said.

The legislation establishes a flexible export taxation system pegged to oil prices and is intended to “perfect the extraction of excess profits from oil companies,” Kairat Kelimbetov, minister of budgeting and economics, was quoted by the Kazakhstan Today news agency as saying.

Prime Minister Danial Akhmetov has repeatedly warned of the danger he sees of giving too much away to Western investors who have a large role in the exploitation of the country’s on and off-shore Caspian Shelf oil and gas fields.

The new taxation would apply to future contracts rather than existing ones, officials have said.

The proposals have still to get approval from the upper house, but this is likely by the end of this year.

Kazakhstan already derives profits from its foreign-operated oil fields through a complex and far from transparent system of royalties and taxes.

The region is home to vast oil and gas reserves but also represents an unprecedented technical challenge for investors due to climatic and geological conditions.

There have been cries of protest at the conditions set by Kazakshtan from Western investors such as Shell, which has questioned the Kazakh side’s readiness to efficiently and transparently handle the vast capital investments required.

For its part Kazakhstan has for months been urging an Eni-led consortium working on the giant offshore Kashagan field to speed up the start of production — originally set for 2005 but likely to be closer to 2007.

The Kazakh side is reportedly set to impose a US$150 million fine on the consortium, which also includes ExxonMobil, Shell and TotalFinaElf, over the delay.