Kazakhstan threatens criminal case against Kashagan operator head
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Kazakhstan warned the managing director of North Caspian Operating Company (NCOC), Giancarlo Ruiu, of possible criminal prosecution over an unpaid $4.92 billion environmental fine. The fine, imposed in 2023 for alleged sulfur storage violations, remains unpaid despite a July 20 deadline for voluntary payment. NCOC and its consortium partners reject the claim and are contesting it in international arbitration.
The Fine and Deadline
Kazakhstan's Ministry of Justice warned NCOC managing director Giancarlo Ruiu of potential administrative and criminal liability for failing to pay a 2.3 trillion tenge ($4.92 billion) environmental fine, according to Reuters. The fine was levied in 2023 for alleged excessive sulfur storage at the Kashagan field. The voluntary payment deadline expired on July 20, after which authorities may initiate forced collection, including an additional 10% surcharge.
Consortium's Position
NCOC, the operator of the Kashagan field, and its contractors reject the fine as unfounded and are challenging it in international arbitration. The consortium includes Shell, Eni, TotalEnergies, ExxonMobil, CNPC, Inpex, and KazMunayGas. The companies argue that the fine cannot be enforced until arbitration concludes.
Kashagan Production Impact
Kashagan produces about 430,000-450,000 barrels of oil per day, making it Kazakhstan's second-largest field. It remains unclear how potential enforcement measures against NCOC could affect output. Sulfur is a byproduct of oil processing, and storage violations are at the center of the dispute.
What's Next
Kazakhstan may initiate forced collection procedures, including a 10% surcharge, after the July 20 deadline passed. It remains unclear whether the dispute will escalate to criminal prosecution or disrupt Kashagan's production.
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Kazakhstan threatens criminal case against Kashagan operator head
