-- A Kazakh court has upheld a $5.1 billion environmental fine against the international consortium operating the Kashagan oil field, the country's second-largest crude producer, Bloomberg reported on Friday, citing the Ministry of Ecology and Natural Resources.
The ruling, delivered on April 8 by an appeals court in Astana, marks a significant setback for the North Caspian Operating Company in its long-running dispute with the Kazakh government.
The fine, totaling 2.36 trillion Kazakhstani tenge ($5.1 billion), was originally imposed for storing excessive amounts of sulfur at the offshore field.
NCOC said it disagrees with the Astana court's ruling, while reiterating that its sulfur-management operations were in full compliance with the law. The energy firm and its shareholders plan to pursue "all available avenues of recourse against this decision to defend their rights".
The sulfur fine is linked to a broader $166 billion international arbitration dispute over Kashagan, Kazakhstan's second-largest oilfield.
Meanwhile, though the court decision has entered into legal force, the NCOC still has the option to file a cassation appeal, the report said.
NCOC is owned by Kazakhstan's state oil and gas company, KazMunayGas, alongside Eni (E), Shell (SHEL), TotalEnergies (TTE), ExxonMobil (XOM), Inpex, and China National Petroleum.
NCOC did not immediately respond to' request for comment.
The oil majors are also contesting the fine through other channels. The companies filed for international arbitration in February. Individually, the companies appealed the sulfur penalty to the Committee for Environmental Regulation and Control, which has yet to issue a decision, the Ministry of Ecology said.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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