Foreign Investors Win $4.2 Billion Environmental Case Against Kazakhstan Over Kashagan Sulfur Dispute — Bloomberg

Foreign investors in Kazakhstan’s Kashagan oil field — part of the NCOC consortium — have won a court case against the government over environmental fines totaling more than $4 billion, Orda.kz reports.

According to Bloomberg, the dispute centered on a fine of around 2.3 trillion tenge (approximately $5.1 billion at the time it was issued, or $4.2 billion at current exchange rates). The Kazakh authorities had accused the consortium of improper sulfur storage.

NCOC announced a favorable ruling in its statement:

We welcome the appellate court’s decision, which confirms the correctness of NCOC’s handling of sulfur in full compliance with the laws of the Republic of Kazakhstan, as well as with established standards and best practices.

The Kashagan project — valued at around $55 billion — has long been plagued by delays, cost overruns, and pricing disputes. Kazakh officials have repeatedly argued that the state is undercompensated and is also entangled in arbitration with NCOC over more than $160 billion in potential damages.

Last year, key consortium members — Eni, Shell, ExxonMobil, and TotalEnergies — offered to resolve the sulfur dispute by pledging an additional $110 million in social investments in Kazakhstan over two years.

Kazakhstan’s Energy Ministry has yet to comment on the court ruling in favor of NCOC.

Back in March, it was already reported that Kazakhstan was likely to lose the case. The consortium had appealed to the Supreme Court to overturn an earlier ruling siding with the government over the alleged sulfur storage violations.

NCOC also disputed other claims related to water treatment and harmful emissions.

Original Author: Nikita Drobny