Exxon blocks proposal to settle $5B Kashagan dispute - Bloomberg
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ExxonMobil (XOM) blocked a proposal for partners in the Kashagan oil field in Kazakhstan to make a settlement with the country's government over a disputed $5B billion environmental fine, Bloomberg reported Friday.
The status of the penalty has become a central issue in Exxon's (XOM) negotiations with the government over a proposal to expand production at Kashagan, and the company indicated that a potential $80B new investment in the field would be contingent on settling the dispute, according to the report.
Exxon (XOM) was not in favor of the most recent proposal and subsequently persuaded TotalEnergies (TTE), one of the partners in the venture, to take its side, which was enough to block a settlement, the report said.
The North Caspian Operating Company - which includes Exxon (XOM), TotalEnergies (TTE), Shell (SHEL), Eni (E), KazMunayGas, Inpex, and China National Petroleum Corp. - has been in a legal standoff with the Kazakh government, which accuses it of sulfur storage-related environmental violations.
Alongside the long-running disagreement, Exxon (XOM) has been pitching a new multibillion-dollar investment to tap an undeveloped part of Kashagan, linking potential development to the resolution of disputes between the Kashagan partners and the government, including the sulfur fine.
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