Years of political instability after independence in 1991 has put off some foreign investment and hampered the development of natural resources, said Hagler Bailly's Michael Biddison at a conference in London.

Draft documents on setting up an independent oil and gas regulatory authority, seen as a key requirement by cautious foreign investors, will go before the Kazakh government in May.

But Biddison said there was no indication of when it would be established.Political uncertainty has prompted confusion and uncertainty raising anxieties among foreign oil and gas companies about the viability of operations.

``There are up to five agencies at central government level and several more at local, regional level that have the power to monitor and enforce oil and gas safety operations,'' said Biddison, also regional administrator for theUnited States Agency for International Development (USAID).

Kazakhstan has made moves to stream-line its bureaucracy, abolishing by presidential decree nine government ministries last year, but there are still many areas in the oil and gas sector where responsibilities overlap and different state agencies are sometimes in conflict with each other. The proposals that will be presented to the Kazakh government in May this year are for the creation of an oil and gas regulatory body that is autonomous, non-political and professional.

``The path for progressive change in the Kazakhstan oil and gas sector continues to require dedication and commitment of government leaders,'' said Biddison. Political analysts say Kazakhstan has managed so far to follow a moderate path following independence in 1991 compared with some of its neighbours, but there were signs of instability in the political structure barely concealed beneath the surface. ``Its political musical chairs -- sometimes you don't know really who wieldsthe influence, it is all quite complex,'' said one oil man with interests in the republic who did not wish to be named.

The country's reformist ex-prime minister Akezhan Kazhegeldin, sacked by president Nursultan Nazarbary last year, was recently appointed the president's economic advisor. Earlier this month, Baltabek Kuandykov, a tycoon in his mid-30s was replaced. (Reuters)