Kashagan is regarded as one of the biggest oil fields that have been discovered. Credit: Zbynek Burival on Unsplash.

The Government of Kazakhstan has initiated arbitration proceedings against the consortium developing its Kashagan and Karachaganak oilfields for claims worth $16.5bn.

According to Interfax, Kazakhstan Energy Minister Almasadam Satkaliyev said: “The authorised government body in the person of the PSA companies have filed lawsuits in international arbitration against the Karachaganak and Kashagan companies.”

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

These have been filed “in the interests of the people of Kazakhstan,” Satkaliyev added.

Earlier, citing sources, Bloomberg reported that operators of the said oilfields in Kazakhstan were accused of unauthorised spending.

Specifically, the Kazakh government believes that operators should not deduct expenses amounting to $13bn for Kashagan and $3.5bn for Karachaganak as part of profit-sharing deals.

See Also:

According to the sources, the government has designated arbitrators to hear the Kashagan and Karachaganak cases in Geneva and Stockholm, respectively.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Kashagan is regarded as one of the biggest oil fields to have been discovered in recent decades.

Eni, Shell, TotalEnergies, ExxonMobil, KazMunayGas, Inpex and CNPC are developing this project.

Meanwhile, Karachaganak, which is also claimed to have a sizable amount of oil and gas, is being operated by Karachaganak Petroleum Operating.

Through its 100% affiliated firm BG Karachaganak, Shell holds a 29.25% share in the Karachaganak project, followed by Eni at 29.25%, Chevron at 18%, Lukoil at 13.5%, and KazMunayGas at 10%.

According to the terms of the production-sharing agreements, if the Kazakh government is successful, it might get a bigger cut of the profits from the fields.