Exxon Links New $80 Billion Kazakh Oil Venture to Feud End

Published 9 August 2026 · finance

(Bloomberg) -- ExxonMobil Holdings Corp. has told Kazakhstan that a potential $80 billion joint investment to expand the Kashagan oil field is contingent on resolving

(Bloomberg) -- ExxonMobil Holdings Corp. has told Kazakhstan that a potential $80 billion joint investment to expand the Kashagan oil field is contingent on resolving a long-running $150 billion dispute between the government and international companies, according to people familiar with the matter. The proposed investment, in an equal joint venture with state-owned KazMunayGas Co., would tap the undeveloped western part of the massive Kashagan oil reservoir, potentially producing as much as 600,000 barrels a day, the people said, asking not to be named because the information is private. In talks with Kazakh officials, the US oil major has linked this potential investment to the resolution of disputes between the Kashagan partners and the government, the people said. This relates to the state’s claims for about $150 billion mostly for lost revenue during development delays, which is subject to international arbitration, and a $5 billion environmental fine. While KazMunayGas has agreed with Exxon’s proposal, the plan would still need to get political approval, which is not certain, the people said.

Exxon, KazMunayGas and Kazakhstan’s Energy Ministry declined to comment for the story on Thursday. KazMunayGas Chairman Askhat Khassenov told reporters in Astana on Friday that “this is inaccurate information,” and “we at KazMunayGas do not confirm what was reported by Bloomberg,” according to Kursiv media. When the Kashagan deposit was found in 2000 it was the largest oil discovery in decades. Italy’s Eni SpA, the field’s operator at the time, expected it to eventually pump as much as 1.5 million barrels a day, but there were numerous delays and cost overruns during the complicated development process. Output from the developed eastern portion of Kashagan is currently about 450,000 barrels a day. The North Caspian Operating Co., the joint venture that operates the project, expects to boost production to about 500,000 barrels a day this year and as much as 710,000 barrels a day by 2031. About 1 billion barrels out of an estimated 16 billion barrels of total recoverable reserves have been extracted from Kashagan in its first decade in operation, according to the government.

Exxon is seeking to unlock about 10 billion of these barrels from the western Kashagan development, according to people familiar with the matter. Bloomberg first reported the company’s initial proposal last year. In Exxon’s plan, other oil majors that are currently partners in Kashagan would be offered minority stakes in the new joint venture, the people said. Companies that joined the new development would be released from the claims related to the sulfur fine when the venture was formed, and from remaining claims at the final investment decision, the people said. Any company that declined the offer would be released by Kazakhstan from the claims, provided they do not dispute the new joint venture’s right to develop the western portion of the field, the people said. These firms also wouldn’t be able to extend their part of the existing license for eastern Kashagan after it expires in 2041, the people said. The development concept for an Exxon-led project to commercialize western Kashagan may cost $250 million, the people said.