Kazakhstan Files Swiss Lawsuit as Part of Ongoing Dispute With Kashagan and Karachaganak Investors

Kazakhstan has filed a lawsuit in Switzerland in an effort to strengthen its position in a large international arbitration dispute with oil companies operating at the Kashagan and Karachaganak fields, Orda.kz reports.

According to Bloomberg, Kazakhstan alleges that contractors working with the oil and gas company Eni took part in corruption schemes that inflated the cost of key contracts. The government is seeking around $15 million in damages plus interest.

The legal action is linked to earlier criminal proceedings in Italy and litigation in Houston.

Bloomberg reports that the case centers on a contract whose value was inflated from $88 million to over $490 million. According to Kazakhstan, the contract was rewritten 11 times. Several contractors working with Eni were convicted of corruption in Italy in 2017. 

However, not a single Eni employee was prosecuted.

To rely on the evidence in the Swiss case, Kazakhstan requested to question former KazMunayGas and Eni executive Maksat Idenov. A US court in Houston approved the questioning, but clarified that his testimony could only be used in the Swiss proceedings — not in the main arbitration case.

Idenov’s representative confirmed that he had already testified. Meanwhile, Eni US successfully rejected Kazakhstan’s requests for further disclosures, arguing that the documents in question did not exist.

PSA LLC, which represents the Kazakh Ministry of Energy, filed three discovery motions in Houston. The court granted them only in part.

In response to Kazakhstan’s allegations, Eni reiterated that these issues had already been examined by Italian courts, where the company was cleared:

The North Caspian Operating Company (NCOC), operator of Kashagan, stated that it is fully complying with the production sharing agreement.

Kazakhstan’s Ministry of Energy declined to provide commentary for Bloomberg.

Kazakhstan is currently involved in several long-running legal battles with investors in the Kashagan field. Last year, the government lost a $4 billion arbitration case regarding sulfur storage violations, with the tribunal siding with the NCOC consortium, which includes Eni, Shell, ExxonMobil, and TotalEnergies.

Astana is also pursuing a much larger claim — exceeding $160 billion — for alleged lost revenues resulting from delays, technical issues, and repeated contract revisions at Kashagan. Arbitration in that matter remains ongoing.

Separately, in late 2024, NCOC proposed settling another environmental dispute by investing $110 million in social projects, reducing sulfur emissions, and supplying gas to the state at lower prices.

One condition, however, required amendments to Kazakhstan’s environmental legislation, complicating the situation for the government.

Original Author: Ruslan Loginov