A court of arbitration in Kazakhstan has ruled in favour of major oil companies in a dispute with the government over a $5bn (KZT2.46trn) environmental fine and tax claims at the Kashagan oilfield, reported Bloomberg.
Kashagan is an oil and gas field located in the Caspian Sea near Atyrau, Kazakhstan.
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The court of arbitration granted a request by oil majors including Eni, Shell, Exxon Mobil and TotalEnergies that Kazakhstan should not collect the fine related to sulphur storage at the field until the matter is fully considered.
The negotiation talks began in November 2023.
This ruling does not resolve the ongoing arbitration process but strengthens the companies’ position in their disputes with the Kazakh Government.
In a separate arbitration ruling, the Kashagan partners secured a decision preventing Kazakhstan’s tax authorities from auditing the country’s oil-profit share, sources said.
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By GlobalDataThe companies argued that only the Energy Ministry’s representation office, as the contractual counterparty, has the authority to conduct such audits.
Kazakhstan’s Energy Ministry has not commented on the rulings. NCOC, which operates the field, and the involved oil majors including Shell, Eni and TotalEnergies declined to comment.
Exxon, Inpex and China National Petroleum, also stakeholders in Kashagan, have also not responded to requests for comment.
Kazakhstan’s total claims, including lost revenue and cost deductions at the field, have surged past $160bn.
The Kashagan partners have also appealed to Kazakhstan’s Supreme Court to overturn an earlier appellate court decision supporting the government’s claim of excessive sulphur storage and other alleged environmental violations.
The field operator, which has denied any wrongdoing, had initially won a challenge to the environmental rulings in a lower court.
The $55bn Kashagan project faced delays and cost overruns.
Kazakhstan, seeking higher oil revenues, sued the joint venture in arbitration over lost revenue, environmental violations and corruption claims.
