Arbitration dismisses Kazakhstan’s $12 billion Kashagan claims — OilPrice
The Permanent Court of Arbitration in The Hague has dismissed Kazakhstan’s $12 billion claims in a dispute with an international consortium over the development of the Kashagan oil field in the Caspian Sea. The claims concerned costs that Kazakhstan says were incurred in 2011–2015. The court concluded that the claims were filed after the statute of limitations had expired. At the same time, the arbitration upheld other claims worth $8 billion, OilPrice reports, citing Bloomberg.
The dispute over Kashagan
Kazakhstan is seeking compensation from a consortium of oil companies that includes ExxonMobil, Shell and TotalEnergies. Astana claims that delays and cost overruns occurred during the development of Kashagan. The Kashagan field is located in the Caspian Sea near the Kazakh city of Atyrau.
According to the U.S. Energy Information Administration, Kashagan has more than 13 billion barrels of recoverable reserves. Production there began in 2016 after years of delays and significant cost increases. Development is complicated by shallow waters, substantial seasonal temperature fluctuations and high levels of toxic and corrosive hydrogen sulfide in the reservoir. Due to the shallow waters and cold climate, the field’s facilities are located on artificial islands.
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Kazakhstan is also making separate claims exceeding $130 billion over lost revenue linked to production delays. ExxonMobil, according to the source, says that further development of Kashagan cannot continue until the arbitration disputes are settled.
Infrastructure plans and production
On the same day, Kazakhstan announced the participation of the International Finance Corporation, the private-sector arm of the World Bank, in preparing $3 billion in infrastructure projects for 2026–2031. The corporation will provide advisory services under Kazakhstan’s Joint Economic Research Program. The initiatives are expected to focus on public-private partnerships, transport infrastructure development and more efficient water resource management.
In the first eight months of 2026, Kazakhstan produced 61.7 million tonnes of oil, 8.4% less than in the same period of 2025. In August, the authorities lowered the forecast for annual production in 2026 to 96 million tonnes after output of nearly 100 million tonnes last year. OilPrice names disruptions on the country’s main export route, the Caspian Pipeline Consortium, as one of the main factors behind the decline.
