million tons of crude oil in the first six months of 2000, up more than 2000 percent on the amount reported the year before.

A report by the Kazakh news agency News base said the Kazakh government had been facing criticism over the amount of oil it exported offshore.

And the Kazakh government said Bermuda was the largest offshore importer of the oil. But sources in Bermuda said that no Kazakh oil was imported, but the Island was being used by companies to avoid paying duty on the substance.

Kazakhstan's Ministry of Energy, Industry and Trade said in a report that more than half of all crude oil exported from the country last year had been delivered to countries that serve as "offshore tax havens''.

It said 63 percent of the 23.7 million tons of oil exported from Kazakhstan last year went to offshore destinations.

The ministry also stated that shipments to offshore customers had generated $1.2 billion in revenue, or almost 59 percent of total export revenues of $2.04 billion in 1999.

The ministry said offshore demand for Kazakhstani oil was reportedly still on the rise.

It said some 3.55 million tons of crude went to Bermuda in the first six months of 2000, up about 200 percent on the figure posted in the same period of 1999.

It said the Virgin Islands took delivery of $441.2 million worth of Kazakhstani oil in the first half of 2000, up more than ten times on the $356.3 million in revenues collected in the same period of 1999.

According to the ministry, the increase is the result of the Kazakhstani government's transfer-pricing policy. That policy makes it possible for oil producers (domestic and foreign) to sell crude oil to subsidiaries that are registered in tax havens at a price below the world market level, it said.