Kazakhstan loses bid to fine Kashagan operator NCOC
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An international arbitration tribunal rejected Kazakhstan's claim to collect a $1.6 billion fine from the Kashagan field operator, NCOC. The Ministry of Justice confirmed the ruling on July 20, saying the state will not appeal.
The Arbitration Ruling
The tribunal, seated in London, ruled that NCOC did not violate the production-sharing agreement for the Kashagan field. Kazakhstan had sought $1.6 billion in penalties for alleged underproduction and cost overruns. The Ministry of Justice stated that the decision is final and binding.
Government Response
Minister of Justice Yerlan Sarsembayev said the government accepts the ruling and will not file an appeal. He noted that the arbitration process cost the state approximately $20 million in legal fees. The ministry emphasized that the decision does not affect the overall terms of the PSA.
What's Next
NCOC is expected to resume normal operations under the existing PSA terms. It remains unclear whether Kazakhstan will seek alternative legal avenues to address its concerns over cost recovery.
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Kazakhstan loses bid to fine Kashagan operator NCOC
