Kashagan Dispute: Oil Giants Win Arbitration Against Kazakhstan - Bloomberg

Oil companies operating in Kazakhstan’s Kashagan oil and gas field have won two arbitration rulings in their ongoing legal battle with the Kazakh government over environmental fines and tax claims, reports Orda.kz, citing Bloomberg.

While these rulings do not conclude the broader arbitration process, they strengthen the companies' position. The court ruled that Kazakhstan cannot collect a $5 billion fine related to sulfur storage until the case is fully resolved, though it did not dismiss the fine. 

Additionally, a separate arbitration ruling prevents Kazakhstan's tax authorities from auditing the companies' share of oil production profits, as the Energy Ministry should conduct such audits under existing agreements.

Kazakhstan’s claims against the companies, including lost profits and disputed deductions, have risen to over $160 billion since the government accused the Kashagan partners of environmental violations two years ago.

The companies, including Eni, Shell, ExxonMobil, and TotalEnergies, have also taken their case to Kazakhstan’s Supreme Court to challenge previous rulings on sulfur storage, water treatment, and emissions violations.

Neither Kazakhstan’s Energy Ministry, field operator NCOC, nor the involved companies have commented. 

At the same time, ExxonMobil and other stakeholders, including Inpex and China National Petroleum Corp., have yet to respond.

Original Author: Oksana Matvienko