NCOC comments on Kazakhstan's claims against consortium

On April 17, Bloomberg published an article stating that Kazakhstan has increased its arbitration claims against international oil companies that develop the Kashagan oil field to over $150 billion, demanding compensation for lost profits in addition to the dispute over costs. The contracting companies consider they have acted in accordance with the country's law and regulations envisioned in the North Caspian Sea Production Sharing Agreement (NCSPSA), NCOC told Kazinform. 

"The RoK and the contracting companies under the NCSPSA (except for the Kazakhstan national oil company subsidiary KMG Kashagan B.V.) have a number of disputes concerning the application of certain NCSPSA [the North Caspian Sea Production Sharing Agreement] provisions, which are subject to arbitration and expert determination under the NCSPSA," NCOC told Kazinform. 

The contracting companies consider that their actions have been aligned with the stipulations of the NCSPSA, as well as in compliance with Kazakhstan's laws and relevant industry standards and best practices.

"Due to the confidential nature of the proceedings, we are unable to provide further comments," said the company. 

Kashagan, one of Kazakhstan's giant oil fields, is being developed by the NCOC consortium, which includes Shell, Eni, TotalEnergies, and Exxon Mobil.

Companies have invested approximately $55 billion in the development of Kashagan, where currently, just under 400,000 barrels of oil are produced per day.

The first oil from Kashagan was extracted in September 2013—eight years later than planned and $45 billion over the initial budget—only to shut down a month later due to leaks discovered in the pipeline. Production resumed in 2016, and by 2017, the field gradually ramped up to producing 270,000 barrels per day. Eni, the lead developer in the project's early stages, estimated that Kashagan would reach a production plateau of at least 1.5 million barrels of oil per day.