Kashagan oil majors to contest $4.8 billion Kazakhstan environmental fine

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Summary · why it matters

Kazakhstan’s government said it may enforce a roughly $4.8 billion environmental fine against the North Caspian Operating Company after July 20, while the operator said the move is prohibited under ongoing arbitration proceedings. The Justice Ministry warned that enforcement measures could include an additional penalty of 10 percent of the recovered sum. NCOC, a joint venture of KazMunayGas, Shell, TotalEnergies, Eni, Exxon Mobil, CNPC, Inpex and others, said an international arbitration tribunal has issued a restraining order blocking enforcement while the case is pending. The operator and its contracting companies reject the fine and the underlying allegations, but the Kazakh energy ministry said the arbitration does not prevent enforcement. The Kashagan field in the Caspian Sea is one of the world’s largest recent oil discoveries, holding an estimated 13 billion barrels of recoverable reserves.

Impact on assets 6

Energy Transition & Power Demand▼
Inpex Corporation
1605
▼ NegativeRegulationrelevance

Inpex faces potential $4.8 billion environmental fine in Kazakhstan, with enforcement risk after July 20.

Shell plc
SHEL
▼ NegativeRegulationrelevance

Shell faces potential $4.8 billion environmental fine in Kazakhstan, with enforcement risk after July 20.

Exxon Mobil Corp
XOM
▼ NegativeRegulationrelevance

Exxon Mobil faces potential $4.8 billion environmental fine in Kazakhstan, with enforcement risk after July 20.

Energy▼
Eni S.p.A.
ENI
▼ NegativeRegulationrelevance

Eni faces potential $4.8 billion environmental fine in Kazakhstan, with enforcement risk after July 20.

TotalEnergies SE
TTE
▼ NegativeRegulationrelevance

TotalEnergies faces potential $4.8 billion environmental fine in Kazakhstan, with enforcement risk after July 20.

Others▲

Off-coverage companies 2

KazMunayGasi
Private▼ NegativeRegulationrelevance

KazMunayGas, as a partner in NCOC, faces potential enforcement of a $4.8B fine and additional penalties.

China National Petroleum Corporationi
Private▼ NegativeRegulationrelevance

CNPC is a partner in NCOC facing a $4.8B environmental fine, which could increase costs and legal risks.