ExxonMobil blocks $5 billion Kashagan oil field settlement

ExxonMobil Holdings Corp. has blocked a settlement proposal regarding a disputed $5 billion environmental fine related to the Kashagan oil field in Kazakhstan. The fine, which stems from a 2022 dispute over sulfur storage, has been a central point in negotiations between ExxonMobil and the Kazakh government.

ExxonMobil has indicated to the government that a potential new $80 billion investment in the Kashagan field is contingent upon the resolution of this dispute. While other consortium partners, including Shell Plc, TotalEnergies SE, and Eni SpA, have discussed various settlement offers totaling approximately $5.2 billion, ExxonMobil’s opposition prevented the latest proposal from moving forward. Reports suggest ExxonMobil also persuaded TotalEnergies to join its position, effectively blocking the compromise.

The consortium managing the project, North Caspian Operating Co. (NCOC), includes KazMunayGas National Co. JSC, Inpex Corp., and China National Petroleum Corp. A court in Atyrau upheld the environmental fine on June 19, and the Kazakh Ministry of Justice announced in July that collection proceedings had begun.