2023-04-05 10:56:13 ET
The companies operating the Kashagan and Karachaganak oil fields in Kazakhstan are being taken to arbitration by the country's government over allegations of unapproved spending, with billions of dollars of revenue at stake, Bloomberg reported Wednesday.
The government claims partners in the projects should not deduct a combined $16.5B in costs for the two oil fields, according to the report; if the government is successful, it could receive a greater share of revenue from the fields, under the terms of production-sharing agreements.
Shell ( NYSE: SHEL ), Exxon Mobil ( XOM ), Eni ( E ), TotalEnergies ( TTE ) and state-run KazMunayGas National Co. are the main partners who have spent more than $50B in the Kashagan project, one of the world's largest oil fields; the partners in the Karachaganak project, led by Shell and Eni, have spent at least $27B.
Arbitrators reportedly were appointed by the government in March to oversee the Kashagan and Karachaganak cases in Geneva and Stockholm, respectively.
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Shell, other oil majors sued by Kazakhstan over billions in revenue - report