Kazakhstan Imposes $28 Million Fine on Oil Firm for Environmental Violations

ALMATY, Kazakhstan: In an unprecedented move, Kazakhstan has fined one of its leading oil companies $28 million for severe environmental breaches, marking a significant shift in enforcement from the energy-rich Central Asian nation. The company, Kaspi Neft, was penalized for failing to secure a permit while amassing over 4,500 tonnes of hazardous waste between 2021 and 2022 from its drilling operations. The fine, equivalent to more than 13 million tenge, was confirmed by the prosecutors of Kazakhstan’s Atyrau region, which borders the Caspian Sea. The court’s decision, announced on Friday, has already been enforced with the penalty paid by the company.

Political Ties and Environmental Concerns

Kaspi Neft is controlled by the son-in-law of former President Nursultan Nazarbayev, who led Kazakhstan for three decades before stepping down in 2019. Despite Nazarbayev’s resignation, his relatives continue to hold influential positions under the current president, Kassym-Jomart Tokayev. The region’s primary oil fields are situated along the Caspian Sea’s coast, which is experiencing significant environmental stress. The sea, the largest inland body of water globally, is suffering from declining water levels due to climate change and is further polluted by various industrial and agricultural activities.

Impact on Caspian Oil Reserves

Among the significant oil fields in Kazakhstan is the Kashagan field, located in the Caspian Sea. This field is one of the world’s most vital offshore reserves, with estimated recoverable reserves of 13 billion barrels of crude oil. Extraction operations at Kashagan involve several major international oil companies, including Italy’s Eni, Britain’s Shell, France’s TotalEnergies, the US’s ExxonMobil, Japan’s Inpex, and China’s CNPC, alongside Kazakhstan’s own KazMunayGas. The fine against Kaspi Neft underscores Kazakhstan’s increasing commitment to addressing environmental violations and protecting its critical natural resources.