European parliamentary member Paul Murphy, currently in Kazakhstan, is claiming that 4,000 oil workers in Zhanaozen in Kazakhstan's Mangistau Region are on strike.

However, the Razvedka i Dobycha KazMunaiGaz joint-stock company, which operates the oil company in question, denies the assertions, Almaty's Interfax-Kazakhstan news agency reported this week.

A release from Razvedka i Dobycha KazMunaiGaz claims that Murphy's statement "does not conform to reality."

The company said 850 people didn't report to work Monday but that the staff at the site is 9,180 people.

Murphy, on his Web site, said the Kazakh national press agency issued a news release that was "an attempt to undermine the purpose of my visit."

Murphy said he was in the area taking part in "GUE / NGL (European United Left/Nordic Green Left Group) delegation to Kazakhstan to meet with trade unionists, community activists, striking workers, opposition parties and human rights organizations."

The dispute has the potential to escalate, as Murphy's Web site released a statement noting, "The European Parliament today reiterated its support for Murphy's statements on the situation in the country in light of false claims from the Kazakhstan national press agency that he is there only in a personal capacity."

Since 1991 the development of Kazakhstan's hydrocarbon resources has been Central Asia's biggest success story. In the past two decades, since the 1991 implosion of the Soviet Union, Kazakhstan has attracted more than $120 billion in foreign direct investment, with nearly all of the funding going into developing Kazakhstan's energy industry.

That industry sector had been largely overlooked in the 1970s as western Siberia's massive oil reserves came online.

Of the 15 former Soviet republics, Kazakhstan is sitting on the sole "superfield" discovered in the last three decades, with its Kashagan offshore Caspian super-field, the largest oil field outside the Middle East.

In terms of reserves, the Kashagan field is fifth largest in the world, with recoverable reserves estimated at 9 billion-16 billion barrels. When fully developed, Kashagan will have a projected peak production of 1.3 million barrels per day.

But labor disputes have been rising in the Kazakh energy industry over the past several years, with many workers complaining that they are paid a fraction of their Western colleagues' salaries. The Zhanaozen dispute is potentially the tip of the iceberg in terms of labor disputes in Kazakhstan's most profitable industry.

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