British oil and gas company files multimillion-dollar lawsuit against Kazakhstan

Victoria Oil & Gas, a British oil and gas company headquartered in London, has initiated legal proceedings against Kazakhstan. The oil company accuses the country of violating the Energy Charter Treaty, an international agreement that establishes a multilateral framework for cross-border cooperation in the energy industry. The claim has been registered with the International Centre for Settlement of Investment Disputes (ICSID), according to the organization’s website.

The standoff has been ongoing since 2021, when the company first threatened to file claims for hundreds of millions of dollars due to the cancellation of a contract to develop the Kemerkol field in the Atyrau region.

Nurlan Zhumagulov, director of the Energy Monitor public foundation, was the first to notice this story. He believes the claim is politically motivated, as the amount of damages claimed is doubtful.

«The field does not amount to hundreds of millions of dollars, unlike the Stati case (the Borankol and Tolkyn fields). Most likely, the claim has more of a political context than an economic one,» he said.

Victoria Oil & Gas bought a 100% stake in this project from Saga Creek Gold Ltd. for $8.5 million in 2005. After drilling began, the company estimated the potential capacity of the field at 15 million tons of oil. However, in 2008, the Kazakh government terminated the contract without publicly disclosing the reasons behind the move.

In the same year, the rights to Kemerkol were transferred to Bakyt Tau LLP for 360 million tenge ($713,983) and then, in 2016, to Ap-Nafta Operating LLP for 1.36 billion tenge ($2.7 million).