Kazakhstan alleges $10.7 billion in corruption regarding Kashagan oilfield contracts

Kazakhstan has filed a confidential arbitration claim alleging that the North Caspian Operating Consortium (NCOC) awarded approximately 12 contracts involving $10.7 billion in unjustified cost increases, bribery, or self-dealing. The allegations concern contracts awarded during the development of the Kashagan oilfield in the 2000s.

This claim is part of a much larger legal dispute in which Kazakhstan is seeking up to $160 billion in damages from the consortium. The government argues that corruptly awarded contracts and subsequent production delays prevented a profit-sharing agreement from taking effect, depriving the state of significant revenue. The NCOC, which includes shareholders such as Shell, ExxonMobil, Eni, TotalEnergies, CNPC, and INPEX, has rejected the allegations, stating that members have acted in accordance with relevant laws and contracts.

The arbitration is currently being heard at the Permanent Court of Arbitration in The Hague and is expected to continue until at least 2028. The ongoing disputes have already impacted investment sentiment, with Shell’s CEO noting that the lack of alignment with the government affects the company’s appetite to invest further in the country.