Kazakhstan to go ahead with $16.5 bln claims against oil majors

Kazakh Energy Minister Almasadam Satkaliyev said on Tuesday that the government plans to go ahead with the $16.5 billion claims against international oil majors over costs and has no plans for a possible out-of-court settlement.

In April, Kazakhstan started arbitration proceedings against companies developing its Kashagan and Karachaganak oilfields over $13 billion and $3.5 billion respectively in costs deducted as part of profit-sharing deals.

“There are working procedures. Arbitrators are being appointed, consultations are underway,” Satkaliyev said.

He also replied negatively to a question about the out-of-court agreement.

The offshore Kashagan field, one of the biggest discoveries in recent decades, is being developed by Eni, Shell, TotalEnergies, ExxonMobil, KazMunayGas, Inpex and CNPC.

Eni, Shell and KazMunayGaz are also partners in Karachaganak, alongside Chevron and LUKOIL.

The two consortia’s offices in Kazakhstan were not immediately available for comment.

The Astana government has already had a series of disputes with its partners about the terms of oil deals, which typically ended with settlements.

According to a Bloomberg report, the claims cover the period from 2010 to 2018 for Kashagan and from 2010 to 2019 for Karachaganak.29dk2902l

Kazakhstan and the Karachaganak consortium settled their most recent dispute in 2018 after three years of negotiations, with the group paying Astana $1.1 billion and giving it a greater portion of future profits.

(Reporting by Mariya Gordeyeva; writing by Vladimir Soldatkin; editing by Jason Neely and David Evans)