Oct. 19 (Bloomberg) -- Germany backed a bid by Kazakhstan to head the Organization for Security and Cooperation in Europe, rejecting international criticism that the former Soviet state's electoral record should bar it from assuming the watchdog's helm.

``I gave the prime minister our assurance that we will gladly support this bid,'' German Economy Minister Michael Glos told reporters in Almaty, Kazakhstan, yesterday. ``We believe efforts'' to head the 56-member OSCE ``can work as an incentive for Kazakhstan to undertake further democratic reforms.''

Glos, who held talks with Kazakh Prime Minister Karim Masimov in the capital Astana on Oct. 17, said Germany also supported the government's efforts to join the World Trade Organization.

The German position defies bodies including the International Helsinki Federation for Human Rights, which oppose Kazakhstan's bid to head the OSCE, the world's largest regional security organization, which is involved in election monitoring.

Glos's comments were made after a meeting in which Masimov provided assurances that Kazakhstan, holder of about 3 percent of the world's oil reserves, would not implement the provisions of a new law that enables the Kazakh authorities to reclaim natural resources from foreign companies.

``Masimov told us that Kazakhstan will pay close attention to its policies and gave reassurance that contracts will not get rewritten,'' Glos said. ``He pledged to do everything to avoid damaging investors' faith in his country.''

The Kazakh parliament approved amendments last month to the so-called natural resource law empowering the government to annul or revise contracts with foreign investors if they fail to honor the terms of agreements.

Italian Dispute

Kazakhstan is trying to resolve a dispute with Eni SpA, Italy's biggest oil company, over costs and delays at the offshore Kashagan field, the world's biggest oil discovery in 30 years.

The Eni-led project to develop Kashagan has been beset by cost overruns, environmental damage and delays estimated by the Kazakh government to amount to $136 billion. Kazakhstan wants a new development plan to be agreed before the end of the year and has threatened to sue Eni and its partners if a deal isn't struck.

Italian Prime Minister Romano Prodi, who led a 200-strong business delegation to Kazakhstan earlier this month, has said the natural resources law would damage the country's relations with international business.

Eni, Exxon Mobil Corp., Total SA and Royal Dutch Shell Plc all hold 18.5 percent of Kashagan, while ConocoPhillips has 9.3 percent. Kazakhstan's national oil company, KazMunaiGaz National Co., and Japan's Inpex Corp. each own 8.3 percent.

Investor `Faith'

``We have no plans to endanger the faith of foreign investors,'' Klaus Mangold, chief lobbyist for eastern Europe at the German BDI industry group, cited Masimov as saying. ``In my view, his commitment is utterly reliable,'' said Mangold, who is accompanying Glos on his trip to Kazakhstan and Azerbaijan.

Kazakhstan ``can achieve a lot through its determined policy of reforms,'' Glos said. WTO membership would ``force'' Kazakhstan to roll back restrictions on customs traffic adopted in August and require the government to subscribe to international guidelines, he said.

Constitutional amendments passed in May handed Kazakh President Nursultan Nazarbayev the right to run for an unlimited number of terms. Nazarbayev's Nur Otan party gained 88 percent of the vote in parliamentary elections in August, winning all 98 seats contested.

To contact the reporter on this story: Andreas Cremer in Baku, Azerbaijan at acremer@bloomberg.net.

Last Updated: October 19, 2007 07:14 EDT