ASTANA — Kazakhstan's Vice Minister of Justice, Daniil Vaisov, reported on the current stage of arbitration proceedings with foreign investors in the major oil and gas projects, Kashagan and Karachaganak, Kazinform reports.
One of the most high-profile cases is an environmental dispute related to exceeding sulfur storage limits at the Kashagan field. The claim amounts to 2.3 trillion tenge (approximately $5 billion). The fine was imposed by the Department of Ecology on the project operator, the NCOC (North Caspian Operating Company N.V.) consortium.
"The first-instance court ruled in favor of Kazakhstan. Six of the seven contractors, excluding KazMunayGas, filed an appeal in March," Vaisov said.
In parallel, Kashagan investors initiated international arbitration. The vice minister explained that the claim was filed under Kazakhstan's bilateral agreements with France and the Netherlands. The dispute will be heard in Washington under the auspices of the International Centre for Settlement of Investment Disputes (ICSID). An arbitral tribunal is currently being formed. Kazakhstan's position is being coordinated by the Ministry of Justice, the Ministry of Ecology, and the Ministry of Energy of Kazakhstan.
Vaisov recalled that the country's interests in the North Caspian Sea production sharing agreement are represented by an authorized body, PSA LLC.
The second major dispute concerns the costs of the Kashagan project, which amount to over $100 billion. According to the production sharing agreements, this issue falls within the competence of the authorized body, which acts within the framework of state policy and in the interests of Kazakhstan.
An interim decision has been made on the Karachaganak project, and work continues. As a reminder, in March 2026, the field operator, Karachaganak Petroleum Operating, was fined 2.07 billion tenge for excessive pollutant emissions and wastewater discharges.
Both fields are of strategic importance to Kazakhstan's economy. Kashagan is one of the largest oil and gas projects in the world, developed by an international consortium. Karachaganak is one of the oldest and most productive fields, being developed with the participation of foreign partners.
Environmental disputes reflect Astana's tightening regulatory policies in the areas of subsoil use and environmental protection. Parallel litigation in national courts and international arbitration courts is standard practice when involving foreign investors protected by bilateral investment treaties.
Final decisions on the claims could take several years and have a significant impact on the investment climate in Kazakhstan's oil and gas sector.
CentralasianLIGHT.org
March 26, 2026