Eni, environmental works in Kazakhstan for 110 million: 5 billion fine avoided
Eni is moving towards a settlement in Kazakhstan to avoid a 5 billion dollar environmental fine. The companies involved, including Eni and the other three large oil companies of the Kashagan consortium (Shell, ExxonMobil and Total), will invest 110 million in social projects and reduce sulfur storage in the Kashagan field. In the event of no agreement, the companies could have resorted to international arbitration. Negotiations are ongoing with the government of Kazakhstan to resolve environmental issues surrounding the oil field. The Kashagan consortium, which developed the $55 billion offshore oil field, is already involved in a separate arbitration over disputed costs of more than $13 billion.
The draft agreement prepared by the companies includes a commitment to invest an additional 110 million in social projects over the next two years, a figure significantly lower than the potential environmental fine requested by the Kazakh authorities, but represents a compromise that seeks to avoid a multibillion-dollar fine. In 2022, the Kashagan consortium faced delays and cost overruns due to operational issues, including corrosion and ruptured pipelines caused by sulfurous gas. The gigantic field in the Caspian Sea was forced to reduce production and suspend operations for maintenance. Eni's stock, in response to this news, closed the session on Piazza Affari with a loss of 0.4% at 14.9 euros per share.
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