ASTANA – Energy companies working the Karachaganak gas condensate field will pay Kazakhstan $1.1 billion (948 million euros) as part of a revenue-sharing agreement, putting an end to a three-year-long dispute, the Kazakh Energy Ministry announced on Monday.
“The Government of Kazakhstan and the shareholders of the Karachaganak project composed of Eni, Shell, Chevron, Lukoil and KazMunaiGas have agreed on a friendly solution to the dispute,” the ministry said.
The dispute centered on “the method of calculating shares in the profitable products section,” the ministry explained, so the Kazakh government filed an international arbitration claim to demand its fair share of profits.
“The parties have found a mutually beneficial and friendly settlement of the dispute” that was filed three years ago, the ministry said.
Future revenues under the plan are expected to total some $415 million (356 million euros) by the year 2037 based on the price of $80 per barrel of Brent.
In addition, the consortium has offered Kazakhstan a 10-year loan for the construction of an infrastructure project worth $1 billion.
“Therefore, the aggregate monetary value of this agreement is more than $1.7 billion (1.5 billion euros) for the republic, of which the State will receive around $1.3 billion (1.1 billion euros) in the coming years,” the Ministry of Energy said.
The parties also agreed on the possible supply of hydrocarbon raw materials (oil and gas) at commercial prices for local refineries and for the development of a gas chemical complex in western Kazakhstan.