ExxonMobil blocks settlement of Kazakhstan’s $5 billion Kashagan fine

ExxonMobil has reportedly blocked a proposal to settle a $5.2 billion environmental fine imposed by Kazakhstan on the Kashagan oil field operators. According to sources familiar with the matter, ExxonMobil successfully persuaded TotalEnergies to join its opposition, effectively halting the settlement attempt.

The dispute stems from a 2022 penalty related to sulfur storage at the field. While Kazakhstan’s state-owned KazMunayGas has reportedly decided to pay its share of the fine, the remaining international partners continue to contest the penalty through international arbitration. The North Caspian Operating Company (NCOC) has stated it considers the fine to be without basis.

The resolution of this fine is tied to future development plans for the field. ExxonMobil has reportedly indicated that a potential $80 billion joint venture to expand production at Kashagan would be contingent on settling the sulfur dispute. However, KazMunayGas has disputed reports regarding the specifics of such a proposed joint venture.