The Government of Kazakhstan has filed a lawsuit against Western oil companies for reimbursement of more than $16 billion
In case of victory, Kazakhstan will be able to return to the budget a significant part of the revenues from the development of the fields
The government of Kazakhstan has filed a lawsuit in an arbitration court against major Western companies operating in two large oil fields, Kashagan and Karachaganak.
The oil giants are accused of unauthorized expenditures and are demanding that more than $16 billion be returned to the Kazakh budget.
Source. Bloomberg
In particular, the Kazakh government demands to return to the state budget about $13 billion from the partners who developed the Kashagan field and about $3.5 billion from the partners of the Karachaganak project.
The authorities insist that the companies deliberately overstated their field development costs between 2010 and 2019. Claims also relate to the tender process – some of them were conducted at inflated prices and were not fully completed.
The lawsuits were filed in the courts of Geneva and Stockholm, which are among the most popular venues for international economic litigation.
The agency notes that if Kazakhstan wins, it will be able to return a significant portion of the revenues from the development of the fields to the treasury.
The consortia North Caspian Operating Company and Karachaganak Petroleum Operating BV, which are developing the fields, did not comment.
Karachaganak is being developed by Shell and Eni, which have invested about $27 billion in the project, and Kashagan is being developed by Shell, Exxon Mobil, Eni and TotalEnergies, which have invested about $50 billion in the development.
The companies developing Kashagan also face a $5.1 billion fine for environmental violations.
Background. Investigators have found that Kazakh businesses are helping Russia to circumvent sanctions – the growth of trade with Russia has been so sharp that Kazakh customs is overloaded.
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