November 26, 2019 / 5:25 AM / 11 days ago

Kazakhstan says $1.1 billion Karachaganak settlement offer insufficient

NUR-SULTAN (Reuters) - Kazakhstan rejected a $1.1 billion (857.37 million pounds) offer to settle a dispute with the consortium led by Royal Dutch Shell (RDSa.L) and Eni (ENI.MI) over the Karachaganak gas condensate field, deeming it insufficient, a Kazakh energy official said on Tuesday.

The Central Asian nation had said in October 2018 it was close to settling a profit-sharing dispute with the group developing the field, which includes Chevron (CVX.N), LUKOIL (LKOH.MM) and Kazakh state energy firm KazMunayGaz KMGZ.KZ.

But the deal has not materialised and the government in Nur-Sultan has remained silent on the reasons for its failure.

“We are not satisfied with the sum that was previously agreed,” First Deputy Energy Minister Makhambet Dosmukhambetov told reporters.

“New circumstances have been uncovered,” he said, without elaborating or giving a figure that would satisfy the government.

Kazakhstan filed a $1.6 billion claim in 2015 against the foreign companies developing Karachaganak, one of the former Soviet republic’s biggest fields, saying it was not receiving its fair share of profit.

Energy Minister Kanat Bozumbayev said in September an arbitration judgment could be delivered next year, although there was still a chance for an out-of-court settlement.

Reporting by Tamara Vaal; Writing by Olzhas Auyezov; Editing by Tom Hogue

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