The court in London partially satisfied the claim of Astana, which demanded more than $6 billion. Although the final amount has not yet been determined, legal advisors suggest it could range from $2 to $4 billion.
The court supported the arguments of the Kazakh government, indicating that the Karachaganak operators improperly compensated for overruns and other expenses from the budget that were not agreed upon and were not subject to reimbursement under the production sharing agreement (PSA). This decision could change the existing formula for oil distribution under this agreement, although the defendants may contest it.
The Karachaganak field, located in Western Kazakhstan, covers an area of over 280 square kilometers and is among the largest in the world. The development of this field is carried out by an international consortium based on a production sharing agreement signed with Kazakhstan on November 18, 1997. The project operators—Royal Dutch Shell and Eni—hold equal shares of 29.25%, while Chevron has 18%, and LUKOIL has 13.5%. The share of the national company KazMunayGas is 10%.
Disputes between Kazakhstan and the Karachaganak operators began in 2023. The initial claim amount was $3.5 billion, but it later increased due to allegations of inflated expenses and possible corruption. In 2024, international companies proposed to resolve the conflict by constructing a gas processing plant for the domestic market; however, this option also became a source of further disagreements. Currently, most of the gas produced at Karachaganak is reinjected back into the reservoir, while the remaining portion is sent to Russia to the Orenburg gas processing plant, as there are no processing facilities at the field.
Discussions about building a gas processing plant at Karachaganak have been ongoing since the early 2000s. Negotiations were held with the field operators, but last summer it became known that the authorities of Kazakhstan rejected the terms proposed by Eni and Shell, which demanded an additional $1 billion on top of 100% of the project costs, which was deemed unacceptable in Astana.
