According to Bloomberg, shareholders of the Karachaganak oil and gas project have lost an international arbitration dispute with the Kazakh government, which means they may be obliged to pay $2 to $4 billion in compensation to the country.
The court sided with the Kazakh government, which claimed that the Karachaganak project partners had reimbursed part of the expenses that were not subject to compensation under the production sharing agreement (PSA).
Even though the final settlement amount has yet to be determined, independent lawyers estimate it could reach up to $4 billion. The decision may still be appealed.
In December, Energy Minister Yerlan Akkenzhenov said that Kazakhstan would consider the Karachaganak dispute verdict as an «indicator» for further negotiations with the project’s shareholders.
Kashagan is the next major dispute
Meanwhile, Kazakhstan is preparing for arbitration over the Kashagan project. The litigation could start in the second half of this year, with the active phase extending until 2028.
According to the ICIJ, the amount of claims in the Kashagan dispute could reach as much as $160 billion.
In 2025, the state-owned company PSA, which represents Kazakhstan in arbitration, also filed a civil lawsuit in Switzerland, alleging corruption schemes related to the development of the Kashagan and Karachaganak fields. However, the project operators, Eni and NCOC, are not named as defendants in the case.
In August 2025, the oil companies developing the Kashagan field won a $4.2 billion settlement in the Astana Court of Appeals over environmental fines.
