Kazakhstan Pursues Kashagan Partners in $5 Billion Sulfur Fine Dispute
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Kazakhstan’s Justice Ministry announced it is considering directly targeting the international partners of the Kashagan oil venture to collect a disputed $5 billion environmental fine. Enforced by a bailiff’s order, potential actions include foreclosing on the assets and funds of the foreign partners, which include Eni, Shell, TotalEnergies, ExxonMobil, Inpex, and CNPC. State bailiffs also hold the authority to seek the suspension of the operating license for the North Caspian Operating Co. (NCOC).
The penalty was issued over allegations of excessive sulfur storage at the field. While an Atyrau court upheld the fine in June, NCOC and its international partners maintain the penalty is baseless and are fighting it through international arbitration. Meanwhile, state-owned partner KazMunayGas has reportedly agreed to pay its portion of the fine. This dispute is part of a broader $166 billion arbitration case brought by Kazakhstan against the venture, which includes claims of environmental infractions, lost revenue, and corruption.
