purchase of a five percent state-owned stake in Kazakhstan's largest oil producer, Tengizchevroil, after months of confusion over the sale.

The deal, which brings Chevron ownership to 50 percent of the producer, was finalised during a visit to the Kazakh capital by US Energy Secretary Bill Richardson, and comes over three months after the two sides first said they had agreed the sale.

"They signed an agreement on the sale and purchase of five percent of Tengizchevroil,'' the prime minister's spokesman, Rasul Zhumaly, told reporters.

Deputy Prime Minister Danial Akhmetov, who was one of the signatories, said the deal was worth $660 million, made up of $450 million for the stake and $210 million as an advance against future production.

Chevron will be required to pay a further $20 million for the development of Astana, Kazakhstan's new capital.

The other signatories were Energy Minister Vladimir Shkolnik and Nick Zana, managing director for Eurasia of Chevron Overseas.

Tengizchevroil, operator of Kazakhstan's largest onshore oilfield, Tengiz, currently produces around 250,000 barrels per day.

Both Chevron and the Kazakh authorities said in May that they had reached an agreement on the sale, which saw the state's holding fall to 20 percent from 25 percent, for $450 million.

But wrangling over tax and debt payments by Tengizchevroil to Kazakhstan saw the deal stalled, and since then it has been unclear whether it had actually gone through or not.

Chevron is one of the largest foreign investors in Kazakhstan, and has recently been criticised by the government over the way it has met its tax obligations.

In particular the government has complained that raw materials producers, including oil and metals companies, have been selling their output to overseas affiliates at below market prices, so reducing their tax bills to Kazakhstan.

These affiliates, the Kazakhs say, have then been on-selling their production at the real market price.

Under this so-called transfer pricing scheme, they say, the difference between the price at which the offshore affiliate buys and sells the output represents a windfall to the company rather than to Kazakhstan.

Kazakh statistics showed Bermuda as a leading export market for Kazakhstan, as an alleged result of this pricing mechanism.

After Tuesday's final agreement, Tengizchevroil partners are: Chevron, 50 percent; ExxonMobil, 25 percent; Kazakhstan, 20 percent; and LUKARCO (five percent), a joint venture between Russia's LUKOIL LKOH.RTS and former US company Arco, which has been bought by BP Amoco.