Kazakhstan's oilfields, disputes and settlements with oil majors

Reuters

28-01-2025

MOSCOW, Jan 28 (Reuters) - Kazakhstan, one of the world's 10 biggest oil producers, increased pressure on international companies operating in the country on Tuesday, calling for improved contract terms.
The move is the latest in a string of claims, disputes and settlements in recent years which saw international firms cede control of oilfields to the state or reach cash settlements.
Following are details on Kazakhstan's main oilfields and pipelines and the main disputes and settlements since the late 2000s.
KASHAGAN
The giant offshore field in the North Caspian Sea was discovered in 2000 and remains one of the biggest discoveries in recent decades, as well as one of the costliest. Oil production started in 2013.
The field produced around 378,500 barrels per day (bpd) in 2024, lower than its initially forecast capacity of 400,000 bpd.
Its development plans aim to increase output capacity to 450,000 bpd.
Kashagan is operated by the North Caspian Operating Company (NCOC) that includes Eni (ENI.MI), opens new tab (16.81% stake), Shell (SHEL.L), opens new tab (16.81%), TotalEnergies (TTEF.PA), opens new tab (16.81%), ExxonMobil (XOM.N), opens new tab (16.81%), KazMunayGaz (KMGZ.KZ), opens new tab (16.88%), Inpex (1605.T), opens new tab (7.56%) and China National Petroleum Corp (CNPC.UL) (8.33%).
KARACHAGANAK
The Karachaganak gas-condensate field was discovered in 1979 in northwest Kazakhstan, covering an area of more than 280 square km (108 square miles). Production started in 1984.
The field is operated by the Karachaganak Petroleum Operating (KPO) consortium which includes Eni (29.25%), Shell (29.25%), Chevron (CVX.N), opens new tab (18%), Lukoil (LKOH.MM), opens new tab (13.5%) and KazMunayGaz (10%)
Oil production reached around 263,000 bpd in 2024.
TENGIZCHEVROIL
The Chevron-led Tengizchevroil (TCO) consortium operates the Tengiz and Korolev fields. Tengiz, Kazakhstan's largest oilfield and one of the world's deepest, was discovered in 1979.
Chevron holds a 50% stake in TCO, while KazMunayGaz has 20%, Exxon 25% and Lukoil 5%.
It produced around 606,000 bpd in 2024.
CPC
More than 80% of Kazakhstan's crude is exported via the 935-mile (1,500-km) Caspian pipeline linking TCO, Karachaganak and other fields to the Russian port of Yuzhnaya Ozereyevka, close to Novorossiisk, which supplies around 1.2% of global oil demand.
The main shareholders in the Caspian Pipeline Consortium (CPC) are Russian pipeline operator Transneft (TRNF_p.MM), opens new tab with a 24% stake, Kazakhstan's KazMunayGaz with 19%, and the Chevron Caspian Pipeline Consortium Company with 15%.
DISPUTES AND SETTLEMENTS
In 2023, Kazakhstan launched claims against companies developing Kashagan and Karachaganak oilfields for $13 billion and $3.5 billion, respectively, over disputed costs.
In 2020, Kazakhstan reached a $1.9 billion settlement, opens new tab with the Karachaganak partners that brought to an end a years-long dispute over profit-sharing from the giant field.
In 2012, partners in the Kashagan consortium agreed to cover $1 billion of Kazakh state energy company KazMunayGaz's extra costs to settle a dispute over the project.
A year earlier, the Karachaganak field consortium led by Eni agreed to give the Kazakh government a 10% stake in the field, valued at $1 billion, as part of a dispute resolution.
It is harder to put a value on other concessions won in Kazakhstan's legal wranglings, such as the addition of some long-term payments, obligations to sell gas to a state entity or non-reimbursement of some historic costs.
In 2008, Kazakhstan doubled its stake in Kashagan to 16.8% as part of a settlement with international oil majors over delays in development of the field.
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