Arbitration Temporarily Blocks Kazakhstan From Collecting Kashagan Fine
Illustration: Orda.kz
The operator of the Kashagan oil field says an international arbitration tribunal has temporarily barred Kazakhstan from collecting an environmental fine of 2.3 trillion tenge, or about $4.9 billion, Orda.kz reports, citing Reuters.
Kazakhstan’s Ministry of Justice previously said the operator must pay the fine by July 20. However, North Caspian Operating Company (NCOC) said the arbitration tribunal had issued a restraining order preventing the authorities from taking steps to collect the fine while the proceedings remain pending.
NCOC and the contracting companies reject the fine and the allegations underlying it and will contest them by all available means,the statement said.
NCOC operates Kashagan, one of Kazakhstan’s largest oil fields. The consortium includes Shell, TotalEnergies, ExxonMobil, China’s CNPC and several other international companies.
Kazakhstan is involved in several arbitration disputes with international oil companies. The authorities accuse them of environmental violations and breaches of their contractual obligations. In January, Kazakhstan secured a favorable ruling in the Karachaganak arbitration, in which it sought around $4 billion.
In December 2022, the Atyrau Region’s Ecology Department inspected NCOC’s operations. The company was accused of violating sulfur-storage rules, and several months later, a regional court imposed a fine of 2.3 trillion tenge. An appeals court upheld the fine.
NCOC has repeatedly challenged the penalty. Its latest appeal was considered in December 2025, when the court rejected the company’s claim, although the ruling has not yet taken effect. During the dispute, the environmental claims became part of broader proceedings involving NCOC and Karachaganak operator KPO. Kazakhstan accuses the companies of improperly fulfilling production-sharing agreements signed in the 1990s.
Original author: Elvira Ivannikova
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