Oil majors to pay settlement

Ag AFP

Nur-Sultan, Kazakhstan: Kazakhstan declared a long-running profit-sharing dispute over a giant oil field settled on Monday after a consortium led by energy majors agreed to pay the Central Asian country $1.3 billion.

Operators Royal Dutch Shell and Italy´s Eni each hold stakes of 29.25 percent at Karachaganak, a giant gas condensate field in the northwest of the energy-rich country.

Smaller stakes are held by Chevron Corp, Lukoil and Kazakhstan´s KazMunayGas. Kazakhstan said the consortium had agreed to pay it a $1.3 billion cash settlement in addition to finalising the terms of production sharing.

The energy ministry said the new terms of the agreement should offer Kazakhstan an extra $600 million through to 2037 if oil prices stay in the $40-50 per barrel range. The Karachaganak project has been plagued by disputes for more than a decade.

The latest disagreement dates back several years when Kazakhstan filed a claim against the majors for $1.6 billion. An energy ministry official said last year that the government had rejected a $1.1 billion offer from the consortium to settle.