(Reuters) – ExxonMobil blocked a proposal for partners in the Kashagan oil field in Kazakhstan to make a settlement with the country’s government over a disputed US$5 billion environmental fine, Bloomberg News reported yesterday, citing people familiar with the matter.
The North Caspian Operating Company (NCOC), which includes Exxon, Shell, Eni and TotalEnergies has been in a legal standoff with the Kazakh government, which accuses it of sulphur storage-related environmental violations.
Here are more details:
- Kashagan, an offshore field in the Caspian Sea, is one of the world’s largest oil discoveries in recent decades, with an estimated 13 billion barrels of recoverable reserves.
- Kazakhstan late last month restarted enforcement action to collect a 2.3 trillion tenge ($5.22 billion) fine from the international consortium operating the Kashagan oil field, Russia’s Interfax news agency reported.
- A Kazakh court dismissed a lawsuit by the field’s operator seeking to overturn the decision to begin enforcement proceedings to collect the fine, Interfax news agency reported late last month.
- The status of the penalty has become a central issue in the oil major’s talks with Kazakhstan over a proposed expansion of production at the Kashagan oil field, the Bloomberg report said.
- Exxon told the Kazakh government that a potential $80 billion investment in the field would depend on resolving the dispute, according to the Bloomberg report.
- Exxon was not in favour of the recent proposal and persuaded TotalEnergies to its side, the report said.
- Exxon did not immediately respond to Reuters’ request for comment.
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