Kazakhstan Applies To Arbitration On Karachaganak Field
Kazakhstan has applied to arbitration to solve the dispute with other shareholders of the Karachaganak project, Kazakh media quoted Kazakh Energy Minister Kanat Bozumbayev as saying.
Karachaganak oil field is being developed within the Production Sharing Agreement reached between Kazakhstan and consortium of Western companies.
“We think that during a certain period of time we did not receive part of the state’s share of oil from the Karachaganak field. We believe that the methodology used by the project contractors to count their share and the share of the republic, it is not fair and does not meet the Production Sharing Agreement,” Bozumbayev said in an interview with Astana TV channel.
The minister said that oil that was not received is worth billions of dollars.
Meanwhile, Kazakhstan is not trying to change the Production Sharing Agreement, stressed the minister.
“The shareholders of Karachaganak have recently made us some proposal, which we are discussing now. I expect we will go through arbitration and negotiate at the same time. If the proposal of Karachaganak contractors satisfies the republic, we step away from the arbitration,” Bozumbayev said.
The Karachaganak oil and gas condensate field, located in the West Kazakhstan province, is one of the largest fields in the world. Its reserve is estimated at over 1.2 billion tons of liquid hydrocarbons and 1.3 trillion cubic meters of gas.
The field produces almost 45 percent of the total volume of gas and 16 percent of the total volume of liquid hydrocarbons produced in Kazakhstan.
In 2015 as much as 141.7 million barrels of oil equivalent was produced from the field.