(Oil Price)– Kazakhstan expects a court ruling on its $3.5-billion lawsuit against international majors by the end of this year, Energy Minister Yerlan Akkenzhenov said on Monday as the country is suing Big Oil in several separate proceedings with total compensation and damage claims of more than $160 billion.
The first arbitration ruling, against the consortium operating the Karachaganak oil and condensate project, could come within weeks, according to Kazakhstan’s energy minister.
“There are arbitration proceedings regarding the Karachaganak project. We expect a decision this month, and it should be made by the end of this year,” Akkenzhenov said on Monday, as carried by Reuters.
In April 2023, Kazakhstan said it was taking to court the oil majors developing the Kashagan and Karachaganak oilfields. The country began arbitration proceedings to claim $13 billion in costs deducted as part of profit-sharing agreements for the Kashagan oilfield and another $3.5 billion for the Karachaganak field development.
Under the profit-sharing agreements for the Kashagan and Karachaganak oilfields, the companies can deduct some costs from the income before sharing it with the government of Kazakhstan.
Karachaganak, one of world’s largest gas and condensate fields, is being developed by Italy’s Eni with a 29.25% stake, UK-based Shell plc with another 29.25%, U.S. supermajor Chevron (18%), Russia’s Lukoil (13.5%), and Kazakhstan’s state firm KazMunaiGas (10%).
Karachaganak holds estimated hydrocarbons initially in place of 13.6 billion barrels of liquids and 59.4 trillion cubic feet (tcf) of gas, with estimated gross reserves of over 2.4 billion barrels of condensate and 16 tcf of gas.
Kazakhstan, where international majors including ExxonMobil, Chevron, Shell, Eni, and TotalEnergies, have developed massive oilfields, has several separate arbitration cases with as much as $166 billion in claims against the majors for damages due to contract delays, cost overruns, and lost revenues from delays at the Kashagan oilfield.
By Tsvetana Paraskova for Oilprice.com
