Kazakhstan still selecting arbitrators for Kashagan and Karachaganak dispute - energy minister
ASTANA. Oct 4 (Interfax) - Kazakhstan is still selecting arbitrators to settle the dispute with the operators of the Kashagan and Karachaganak oil and gas fields, Energy Minister Almasadam Satkaliyev said.
"This is a purely commercial dispute. The routine process as necessary is underway; we are selecting arbitrators and going through the required approvals in accordance with international standards for arbitration," the minister told journalists on Wednesday in Astana.
The government of Kazakhstan filed lawsuits with claims of $16.5 billion against the operators of the country's largest oil fields, Kashagan and Karachaganak.
Bloomberg, citing sources, reported earlier that the operators of Kazakhstan's two largest oil fields, Kashagan and Karachaganak, were sued by the government in an arbitration court in connection with accusations of unauthorized spending.
The government believes that the partners in the projects should not have deducted expenses totaling $13 billion for Kashagan and $3.5 billion for Karachaganak, Bloomberg's sources said.
The Kashagan field is one of the largest in the world discovered in recent decades. Its recoverable reserves range from 9 to 13 billion barrels of oil. Commercial production began in the fall of 2016.
The shareholders of the NCOC consortium, the operator of Kashagan, are KMG Kashagan B.V. (16.877%), Shell (SPB: RDS.A) Kazakhstan Development B.V. (16.807%), Total EP Kazakhstan (16.807%), AgipCaspian Sea B.V. (16.807%), ExxonMobil Kazakhstan Inc. (16.807%), CNPC Kazakhstan B.V. (8.333%), and Inpex NorthCaspian Sea Ltd. (7.563%).
The Karachaganak field is one of the largest in the world. Its oil reserves total 1.2 billion tonnes, and gas reserves are 1.35 trillion cubic meters. The development of Karachaganak, according to the PSA signed in 1997 with a duration of 40 years, is being done by the KPO International Consortium consisting of Shell (29.25% via 100% affiliated company BG Karachaganak Limited), Eni (29.25%), Chevron (18%), Lukoil (13.5%), and KazMunayGas (10%).