Kashagan arbitration dismisses Kazakhstan’s $12 billion claim
An international arbitration has dismissed Kazakhstan’s $12 billion claim against the major shareholders of North Caspian Operating Company N.V. (NCOC), the operator of the Kashagan field, Bloomberg reported, citing sources familiar with the matter.
The tribunal, however, supported other claims by Kazakhstan totaling approximately $8 billion. Still, the arbitration process is ongoing, as the country’s government continues to seek $150 billion in compensation for lost profits.
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In 2023, Kazakhstan filed an initial $13 billion claim against NCOC. The figure later rose to $15 billion after the government said the international companies violated tender procedures and environmental legislation and failed to fully execute contractual work. Subsequently, Kazakhstan raised its total arbitration demands to $150 billion.
The dispute over the costs is part of a protracted legal battle between Kazakhstan and the oil companies managing Kashagan, one of the world’s largest oil fields.
Overall, Kazakhstan has sought to recover approximately $20 billion in expenditures after production at the oil field began several years behind schedule and cost more than expected. The arbitration tribunal found that the claim was filed too late, as the costs were incurred between 2011 and 2015. Nevertheless, it agreed to proceed with other claims totaling $8 billion, according to people familiar with the matter who asked not to be identified.
ExxonMobil Holdings Corp. is a key partner in NCOC, alongside Eni SpA, Shell Plc, TotalEnergies SE, KazMunayGas, China National Petroleum Corporation (CNPC) and Japan’s Inpex Corporation.
Kazakhstan’s Ministry of Energy and NCOC did not respond to Bloomberg’s requests for comment. ExxonMobil, Shell, TotalEnergies, KazMunayGas and Inpex declined to comment, while CNPC and Eni did not respond immediately.
Kashagan has emerged as one of the largest oil fields discovered in recent decades, though its development has been fraught with numerous technical challenges. Overall, the partners have invested about $55 billion to develop the offshore field, which produced an average of about 400,000 barrels per day in 2025.
Initial oil production at Kashagan began in September 2013 — eight years behind schedule and $45 billion over the original budget. Operations were suspended just one month later after leaks were discovered in a cracked pipeline. NCOC resumed production in 2016.
ExxonMobil told Kazakhstan’s authorities that the $80 billion investment it previously announced for the Kashagan expansion depends on resolving the arbitration dispute.
Meanwhile, NCOC reported $4.1 billion in revenue last year under the production-sharing agreement for the Kashagan field, ranking first among Kazakhstani companies by this measure.
