Azernews.Az

By Alimat Aliyeva

British oil and gas company Victoria Oil & Gas has filed a lawsuit against Kazakhstan, citing provisions under the Energy Charter Treaty. The claim has been formally registered with the International Center for Settlement of Investment Disputes (ICSID), Azernews reports.

In April 2021, the company had already announced its intention to pursue legal action against Kazakhstan, seeking compensation for the termination of its contract for oil exploration and production at the Kemerkol field in the Atyrau region. Victoria Oil & Gas alleges that the termination of the agreement resulted in a loss of hundreds of millions of dollars in potential revenue.

Energy expert Nurlan Zhumagulov, Director of the Energy Monitor Public Foundation, commented on the lawsuit, suggesting that the motives behind the legal action may be more political than economic. “The deposit in question is clearly not worth hundreds of millions of dollars,” Zhumagulov said. “It’s likely that this lawsuit has more political implications than it does economic ones.”

Kazakhstan has long been a focal point for energy companies due to its rich natural resources, but it has also been a region where disputes over contracts and resources are not uncommon. In this case, the involvement of the Energy Charter Treaty—a multilateral agreement aimed at promoting energy cooperation and protecting investments—suggests that the dispute could have broader implications for international business relations in the energy sector.

The lawsuit comes at a time when Kazakhstan’s government has been tightening control over its oil and gas sector, prompting some foreign companies to face challenges in maintaining their operations. The country’s legal framework around energy contracts and foreign investments has been a point of contention for a number of international companies operating in the region.

While the economic value of the Kemerkol field itself might be questioned, the lawsuit may reflect deeper tensions over the broader investment climate and political considerations in Kazakhstan’s energy sector. The outcome of this case could potentially influence future foreign investment in Kazakhstan, particularly in the oil and gas industry.