Kazakhstan sues foreign oil majors over struggling Kashagan field

|By:, SA News Editor

Kazakhstan's government is suing foreign oil companies developing its huge Kashagan oilfield in the Caspian Sea, a tactic used earlier in securing the government large stakes in two of the three multinational energy projects on its territory.

The development consortium, led by Exxon (XOM), Shell (RDS.A, RDS.B), Total (TOT) and Eni (E) as well as Kazakh state oil firm KazMunaiGas, may face Kazakhstan seizing a bigger stake in Kashagan or refusing to reimburse part of the $50B spent on bringing it onstream.

Repeated delays at Kashagan have infuriated the government; production finally began in September after 13 years but was stopped a few weeks later after gas was found to be leaking from its pipelines.

The government says its checks show the volume of gas burned off after the discovery of the leak totaled 2.8M cubic meters, and thus is claiming $737M against the consortium.