The settlement offer that was rejected by the government included a new method for calculating the “fairness index” in the future as well as a payment worth about $300m in respect of past years, the person said.
Shell and Eni (which each have a 29.25 per cent stake in the project), Chevron (18 per cent) and Lukoil (13.5 per cent) all declined to comment.
Should the Kazakh government and international oil majors fail to reach agreement, the dispute could end up in international arbitration.
However, one person familiar with the discussions said that the government may put more pressure on the shareholders, including by potentially launching a “state audit” of the project, if a deal cannot be reached.
On the other hand, the government is hoping the shareholders will approve a $12bn expansion of the Karachaganak field next year, which is necessary in order to prevent a sharp decline in production in the medium term. Such an investment would be unlikely with the dispute ongoing."