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Shell, Eni venture to pay $1.1B to settle Kazakhstan dispute

 

By: , SA News Editor

An energy consortium led by Royal Dutch Shell (RDS.A, RDS.B) and Eni (NYSE:E) developing the Karachaganak gas condensate field will pay $1.1B to Kazakhstan’s government to settle a profit-sharing dispute, the country’s energy ministry says.

Kazakhstan says its production sharing agreement with the consortium also will amend terms so that it will receive a higher share of future revenues from one of the country’s biggest hydrocarbon fields.

The consortium, which also includes Chevron (NYSE:CVX), Russia’s Lukoil (OTCPK:LUKOY) and Kazakh state-owned company KazMunayGaz, produced 8.4M metric tons of condensate at Karachaganak during the first eight months of this year.

Kazakhstan filed a $1.6B claim against the foreign firms developing Karachaganak in 2015, alleging that it had not received its fair share of income from the giant project; the two sides have since discussed various ways of settling the dispute.

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