ASTANA (Reuters) – Kazakhstan has started arbitration proceedings against companies developing its giant Kashagan and Karachaganak oilfields over $13 billion and $3.5 billion, respectively, in deducted costs, Energy Minister Almasadam Satkaliyev said on Tuesday.
“I can only say these lawsuits have been filed in the interest of the people of Kazakhstan,” Satkaliyev told reporters, refusing to provide any further details about the claims.
The offshore Kashagan field, one of the biggest discoveries in recent decades, is being developed by Eni, Shell (LON:), TotalEnergies, ExxonMobil (NYSE:), KazMunayGas, Inpex and CNPC.
Eni, Shell and KazMunayGaz are also partners in Karachaganak, alongside Chevron (NYSE:) and LUKOIL.
Both projects are covered by production sharing agreements stipulating that companies can deduct certain costs from income before splitting it with the government. The size of the deductions claimed by the companies would determine how much income there is to be split between them and the government.
Kashagan and Karachaganak are the second- and third-biggest producers of oil respectively in the Central Asian nation whose economy relies heavily on energy exports.
The Astana government has already had a series of disputes with its partners about the terms of oil deals, which typically ended with settlements.
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