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Cases / Oil, gas and coal operations · Kazakhstan · 2013–2025

Kashagan gas flaring: KZT 134.2 billion damage order (2014) and KZT 3.6 billion award (2025)

Nature's voice · report
In September–October 2013 residual sour gas from Kashagan was flared at the processing plants on my land after pipeline leaks, according to the Environment Protection Ministry as reported by Reuters.
Did nature suffer? Yes. Harm is on record. Disputed
Recorded
  • The Atyrau Department of Ecology named sulphur dioxide from flaring as the pollutant at issue in my air, and said soot is expected when such volumes are flared. Ak Zhaik
  • A gas pipeline ruptured near Bolashak on 24 September 2013 and released hydrogen sulphide. Lada.kz
What the record lacks: 5 none on record · 2 not disclosed · 6 disputed · 1 unclear See the gaps
Accounts of the harm differ
Volume of gas flared in 2013
  • Press and investigations Reuters via Rogtec (March 2014): 2.8 million cubic metres above legal limits in September–October 2013. Rogtec
  • Press and investigations Ak Zhaik (June 2014): About 3 million cubic metres of sour gas. Ak Zhaik
  • Press and investigations Lada.kz citing the inspection act (April 2014): “2,795,149 thousand cubic metres” of acid gas above the permitted limit. Lada.kz
Sulphur dioxide limit used in the damage calculation
  • Company or project NCOC and Agip KCO: The audit used a maximum permissible concentration of 0.05 mg/m³ instead of 0.125 mg/m³, overestimating the damage. Ak Zhaik
  • Government and regulators Head of the Atyrau Ecology Department: 0.05 was an error in a 2012 Health Ministry resolution; the department used the correct figure. Ak Zhaik

After pipeline leaks in September–October 2013, the Atyrau Department of Ecology ordered the Kashagan operator and Agip KCO to pay KZT 134.2 billion for gas flaring; three court levels upheld the order in 2014, and a confidential December 2014 agreement followed. A separate 2024 flaring claim was awarded in January 2025 and paid in July 2025.

KZT 134.2bnEnvironmental damage order for flaring, Atyrau Department of Ecology, March 2014
Reported by Reuters as US$737 million. Upheld by three court levels in 2014; Zakon.kz reported in February 2015, citing unnamed sources, that it was no longer in effect under a December 2014 agreement.

Status As of July 2025: the KZT 3.6 billion award for unauthorised flaring was paid in full; the KZT 134.2 billion order of 2014 was reported in February 2015, citing unnamed sources, as no longer in effect.

What?
The Atyrau Department of Ecology ordered the Kashagan operator and Agip KCO to pay KZT 134.2 billion for gas flaring after the 2013 pipeline leaks; courts upheld it in 2014 and a confidential agreement followed in December 2014. A 2024 claim for unauthorised flaring ended with an award in January 2025 and payment of KZT 3.6 billion by July 2025. Rogtec
Where?
Kashagan field (D Island, offshore North Caspian) and the Bolashak onshore processing plant, Atyrau region, Kazakhstan. Lada.kz
When?
Leaks 24 September and 9 October 2013; order March 2014; court rulings 29 April, 6 June and 23 July 2014; agreement 13 December 2014; claim December 2024; award January 2025; payment confirmed 25 July 2025. Ak Zhaik
Who?
Gained
  • Kazakh state budget — KZT 3.6 billion in environmental damage paid in 2025; KZT 222 million and administrative fines of more than KZT 10 billion paid earlier Orda.kz
  • Astana EXPO-2017 — US$50 million contribution in 2015 under the agreement, per Zakon.kz's unnamed sources; payment not confirmed Zakon.kz
Lost
  • NCOC and Agip KCO — Ordered to pay KZT 134.2 billion in 2014 (payment of any part is not on record); NCOC paid KZT 3.6 billion in 2025 Rogtec
Harmed
  • Air around the Kashagan processing plants — Sulphur dioxide from flaring of residual sour gas in September–October 2013 (Atyrau Department of Ecology) Ak Zhaik
Why?
Pipeline cracking caused by sulphide compounds led to leaks, and residual sour gas was flared; the 2024 claim concerned flaring of crude gas without the authorisation of the competent authority. Lada.kz
How?
An administrative damage order upheld through three court levels in 2014, then a confidential government–consortium agreement; the 2024 claim was a civil claim by the Ministry of Energy inspectorate. Ak Zhaik
6 of 6 questions answered from the record

What happened

The record, in order.

Kashagan production started on 11 September 2013 after 13 years of development and about US$50 billion of spending. On 24 September 2013 a gas pipeline ruptured near the Bolashak plant, releasing hydrogen sulphide; residual sour gas was flared, wells reopened on 6 October and a new leak occurred on 9 October 2013, and output halted. The direct cause of the pipeline failure was cracking caused by sulphide compounds (Lada.kz). In March 2014 the Atyrau Department of Ecology ordered NCOC and Agip KCO to pay KZT 134.2 billion for environmental damage from flaring.

On 29 April 2014 the Specialised Interdistrict Economic Court of Atyrau Region rejected the companies' challenge; the appeals board of the Atyrau regional court upheld the ruling on 6 June 2014, and the cassation board dismissed the companies' complaint on 23 July 2014, after the Department had filed a claim to collect the amount in early July. In court the companies argued that the damage was “astronomical” and that the audit used a sulphur dioxide limit of 0.05 mg/m³ instead of 0.125. The department head said 0.05 was an error in a 2012 Health Ministry resolution and that the department used the correct figure.

On 13 December 2014 the Minister of Energy and the NCOC/NCPSA companies signed a confidential agreement in Astana; NCOC said its terms were confidential. Zakon.kz reported on 17 February 2015, citing unnamed sources, that the KZT 134.2 billion claim was no longer in effect, that administrative fines of KZT 10.287 billion already paid were credited as full compensation for flaring and related emissions from 11 December 2012 to 28 January 2014, and that NCOC would contribute US$50 million in 2015 to Astana EXPO-2017. Ak Zhaik, citing unnamed sources, also reported EXPO support under the agreement, without an amount. Zakon.kz noted that it found no official denial and no direct official confirmation of the write-off.

In December 2024 the Western Interregional Department of the State Inspectorate in the Oil and Gas Complex of the Ministry of Energy sued NCOC N.V. (Astana branch) for more than KZT 3.5 billion for flaring crude gas without authorisation. In January 2025 the economic court of Astana granted the claim, awarding KZT 726,998,611 and KZT 2,823,549,395 in damages plus KZT 73,840,000 in state duty, and rejected NCOC's argument that clause 38.1 of the production sharing agreement (UNCITRAL arbitration) applied. On 25 July 2025 the Atyrau prosecutor's office confirmed that KZT 3.6 billion in environmental damage had been paid in full to the budget.

Kazakh law bans flaring of raw gas except in emergencies threatening life, health or the environment (Reuters) or where technologically unavoidable (Ministry of Energy). For national context, World Bank data put Kazakhstan's flared volume at 6.07 billion cubic metres in 2013 and 0.71 billion in 2025, and the World Bank said on 23 June 2026 that Kazakhstan had reduced flaring by 87% since 2012.

  1. 2013Production starts (11 Sep); gas pipeline rupture near Bolashak, hydrogen sulphide leak, residual gas flared (24 Sep); wells reopened (6 Oct); new leak (9 Oct)
  2. 2014Department of Ecology order of KZT 134.2bn (Mar); economic court rejects the challenge (29 Apr); appeals board upholds (6 Jun); collection claim filed (early Jul); cassation board dismisses complaint (23 Jul); confidential agreement signed (13 Dec)
  3. 2015Zakon.kz reports, citing unnamed sources, that the claim is no longer in effect (17 Feb)
  4. 2024Ministry of Energy inspectorate sues NCOC for more than KZT 3.5bn for unauthorised flaring (Dec)
  5. 2025Astana economic court grants the claim (Jan); prosecutors confirm full payment of KZT 3.6bn (25 Jul)

What was said

Claims, in the words of those who made them.

“Whether we appeal also at national level will be decided at a later stage.”

NCOC, via Reuters · March 2014 · Rogtec

“The amount of damage is astronomical, it is highly overestimated”

NCOC and Agip KCO in court, as reported by Ak Zhaik · June 2014 · Ak Zhaik

“The court ruling is a great distress to us.”

NCOC, as reported by Ak Zhaik · June 2014 · Ak Zhaik

“The terms of agreement are confidential.”

NCOC press release · December 2014 · Ak Zhaik

“are fined twice and even three times for the same violation”

Uzakbai Karabalin, First Deputy Energy Minister, on subsoil users, as reported by Zakon.kz (translated) · 2015 · translated from Russian · Zakon.kz

“In world practice there is, of course, no such thing.”

Uzakbai Karabalin, First Deputy Energy Minister, as reported by Zakon.kz (translated) · 2015 · translated from Russian · Zakon.kz

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Volume of gas flared in 2013
Press and investigations
Reuters via Rogtec (March 2014)

2.8 million cubic metres above legal limits in September–October 2013.

Rogtec
Press and investigations
Ak Zhaik (June 2014)

About 3 million cubic metres of sour gas.

Ak Zhaik
Press and investigations
Lada.kz citing the inspection act (April 2014)

“2,795,149 thousand cubic metres” of acid gas above the permitted limit.

Lada.kz
Sulphur dioxide limit used in the damage calculation
Company or project
NCOC and Agip KCO

The audit used a maximum permissible concentration of 0.05 mg/m³ instead of 0.125 mg/m³, overestimating the damage.

Ak Zhaik
Government and regulators
Head of the Atyrau Ecology Department

0.05 was an error in a 2012 Health Ministry resolution; the department used the correct figure.

Ak Zhaik
Whether and how the KZT 134.2 billion order was written off
Press and investigations
Zakon.kz (17 February 2015)

Citing unnamed sources, the claim is no longer in effect under the December 2014 agreement; fines of KZT 10.287 billion already paid were credited.

Zakon.kz
Company or project
NCOC

Parties resolved production, financial and environmental issues; the terms are confidential.

Ak Zhaik
Government and regulators
Ministry of Energy

No official confirmation or denial on record.

Amount of the 2025 award
Courts
Astana economic court (Reuters, January 2025)

KZT 726,998,611 plus KZT 2,823,549,395 in damages plus KZT 73,840,000 state duty, about KZT 3.5 billion.

The Moscow Times
Government and regulators
Atyrau prosecutor's office (25 July 2025)

KZT 3.6 billion in environmental damage paid in full.

Orda.kz
Forum for the 2024 claim
Company or project
NCOC

Clause 38.1 of the production sharing agreement sends the dispute to international arbitration.

BES.media
Courts
Astana economic court

Rejected the argument and granted the claim.

The Moscow Times

How it looked

What was shown, beside what was recorded.

Shown

  • Headline: “Kazakhstan effectively 'wrote off' NCOC's multi-billion environmental fine”.
    Zakon.kz, 17 February 2015 · Zakon.kz
  • The parties resolved production, financial and environmental issues.
    NCOC press release, December 2014, as reported by Ak Zhaik · Ak Zhaik
  • The Kashagan dispute belongs in international arbitration under clause 38.1 of the production sharing agreement; NCOC acts only as representative of the subsoil user.
    NCOC in the 2024 case, as reported by BES.media · BES.media

Recorded

  • Order of KZT 134.2 billion (US$737 million) by the Atyrau Department of Ecology against NCOC and Agip KCO, March 2014; upheld by the specialised interdistrict economic court (29 April 2014), the appeals board (6 June 2014) and the cassation board (23 July 2014).
    Rogtec
  • KZT 222 million paid earlier for gas released during the 24 September 2013 pipeline accident; more than KZT 10 billion (KZT 10.287 billion) in administrative fines previously paid, credited under the December 2014 agreement according to Zakon.kz's unnamed sources.
    Zakon.kz
  • Zakon.kz and Ak Zhaik reported, citing unnamed sources, support for Astana EXPO-2017 under the December 2014 agreement; Zakon.kz gave the amount as US$50 million in 2015. Zakon.kz also listed VAT refunds by 30 June 2015, consultation on future flaring and emissions legislation, and continued social-infrastructure funding in Atyrau and Mangystau.
    Zakon.kz
  • 2025 award: KZT 726,998,611 plus KZT 2,823,549,395 in damages plus KZT 73,840,000 state duty; KZT 3.6 billion in environmental damage confirmed paid in full to the budget by the Atyrau prosecutor's office on 25 July 2025.
    The Moscow Times
  • World Bank flare-volume estimates for Kazakhstan, in billion cubic metres: 2012 5.52; 2013 6.07; 2014 6.14; 2015 5.67; 2016 3.22; 2017 2.68; 2018 2.38; 2019 1.66; 2020 1.44; 2021 1.49; 2022 0.85; 2023 0.81; 2024 0.85; 2025 0.71. Flaring intensity in cubic metres per barrel: 2012 9.98; 2016 5.53; 2020 2.24; 2023 1.19; 2024 1.29; 2025 0.95. These are national figures, not for the Kashagan project.
    World Bank
  • World Bank, 23 June 2026: “Kazakhstan has reduced flaring by 87% since 2012, including a further 16% reduction in 2025 alone.” The 2026 flaring tracker attributes it to sustained regulatory pressure, government commitment and targeted infrastructure investment.
    World Bank

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
Remediation or restoration funded by the order or the award—
None on record.

Gained elsewhere

Not totalled
Environmental damage order, Atyrau Department of Ecology (March 2014)134.2bn
Window: 2014
Reported as US$737 million. Payment of any part of it is not on record.
Paid for gas released in the 24 September 2013 accident222m
Window: 2013
Administrative fines previously paid, credited under the December 2014 agreement (Zakon.kz, unnamed sources)10.3bn
Window: 2014
Contribution to Astana EXPO-2017 under the agreement (Zakon.kz, unnamed sources)—
Window: 2015
US$50 million; payment and legal form not stated.
Environmental damage paid in full to the budget (Atyrau prosecutor's office)3.6bn
Window: 2025
Currency: KZT · Window: 2013–2025 (mixed — see each line). Figures cover different periods and are not compared as a ratio. * Estimate built from cited figures.

Responses on record

  • NCOC (March 2014): Appealed the ecological fines; whether to appeal at national level would be decided later. · Rogtec
  • NCOC (June 2014): The amount of damage is highly overestimated; the audit used a sulphur dioxide limit of 0.05 mg/m³ instead of 0.125. · Ak Zhaik
  • NCOC (December 2014): The terms of the December 2014 agreement are confidential. · Ak Zhaik
  • NCOC (December 2024): In the 2024 case the dispute belongs in international arbitration under clause 38.1 of the production sharing agreement; NCOC acts only as representative of the subsoil user. · BES.media
  • NCOC (January 2025): Did not immediately respond to Reuters on a possible appeal. · The Moscow Times

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

  1. 2014–2014Defendant wonKZT 134.2bn environmental damage order upheld
    NCOC and Agip KCO v. Atyrau Department of Ecology (challenge to the KZT 134.2bn order)
    Specialised Interdistrict Economic Court of Atyrau Region · Administrative · NCOC and Agip KCO → Atyrau Department of Ecology

    On 29 April 2014 the court dismissed the challenge and held the order lawful. Lada.kz

  2. 2014–2014Defendant wonKZT 134.2bn order upheld
    Appeal of NCOC and Agip KCO against the KZT 134.2bn order
    Board of Appeals, Atyrau Oblast Court · Appeal · NCOC and Agip KCO → Atyrau Department of Ecology

    The appeals board upheld the ruling on 6 June 2014. Ak Zhaik

  3. 2014–2014Defendant won
    Cassation complaint of NCOC and Agip KCO
    Cassation board, Atyrau regional court · Appeal · NCOC and Agip KCO → Atyrau Department of Ecology

    The cassation board dismissed the companies' complaint on 23 July 2014. Ak Zhaik

  4. 2014–Outcome not on recordKZT 134.2bn amount claimed
    Department of Ecology collection claim for KZT 134.2bn
    Court not named · Administrative · Atyrau Department of Ecology → NCOC and Agip KCO

    Filed in early July 2014. Zakon.kz reported in February 2015, citing unnamed sources, that the claim was no longer in effect under the December 2014 agreement; no official confirmation of the write-off is on record. Zakon.kz

  5. 2024–2025Claimant wonKZT 3.6bn environmental damage paid in full (Atyrau prosecutor's office, July 2025)
    Ministry of Energy inspectorate v. NCOC N.V. (flaring of crude gas without authorisation)
    Economic court of Astana · Civil · Western Interregional Department of the State Inspectorate in the Oil and Gas Complex, Ministry of Energy → NCOC N.V. (Astana branch)

    The January 2025 award was KZT 726,998,611 plus KZT 2,823,549,395 in damages plus KZT 73,840,000 state duty; the court rejected NCOC's argument that clause 38.1 of the production sharing agreement applied. The Atyrau prosecutor's office confirmed full payment on 25 July 2025. The Moscow Times

Insurers

No insurer decision on record.

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

Damage order for flaring, 2014
KZT 134.2bn
Upheld by three court levels; later reported, citing unnamed sources, as no longer in effect
Pollutant named
Sulphur dioxide
From flaring in September–October 2013, per the Atyrau Department of Ecology
Environmental damage paid, 2025
KZT 3.6bn
Confirmed by the Atyrau prosecutor's office on 25 July 2025

What we don't know

Undisclosed, unproven, untried: recorded as data.
Court ruling existsKey earnings undisclosed

Nature

  • Disputed Volume of gas flared in 2013
  • Disputed Sulphur dioxide limit used in the damage calculation

Money

  • None on record Remediation or restoration funded by the order or the award — None on record.
  • None on record Contribution to Astana EXPO-2017 under the agreement (Zakon.kz, unnamed sources) — US$50 million; payment and legal form not stated.

Court

  • Unclear Department of Ecology collection claim for KZT 134.2bn: outcome not on record.

Accounts

  • Disputed Whether and how the KZT 134.2 billion order was written off
  • Disputed Amount of the 2025 award
  • Disputed Forum for the 2024 claim
  • None on record Ministry of Energy: No official confirmation or denial on record.

Record

  • Disputed Figures differ: Reuters (via Rogtec) gave the 2013 flared volume above legal limits as 2.8 million cubic metres; Ak Zhaik gave about 3 million cubic metres of sour gas; Lada.kz, citing the inspection act, gave “2,795,149 thousand cubic metres”.
  • Not disclosed Not disclosed: the terms of the December 2014 agreement; NCOC said they are confidential.
  • None on record None on record: an official confirmation or denial of the write-off of the KZT 134.2 billion claim; Zakon.kz noted neither.
  • None on record None on record: payment of any part of the KZT 134.2 billion order.
  • Not disclosed Not disclosed: the volumes and period of the flaring covered by the 2024 claim.

Did the harm stop?

Output halted in October 2013 after the leaks; no source states when the flaring ended.

Who paid?

The companies paid KZT 222 million for gas released in the September 2013 accident and administrative fines of more than KZT 10 billion, which Zakon.kz's unnamed sources said were credited as full compensation; NCOC paid KZT 3.6 billion in 2025 for later flaring. Payment of any part of the KZT 134.2 billion order is not on record.

Sources

Voices on record: — Company or project— Government and regulators— Courts✓ Press and investigations— Communities and civil society— Researchers✓ International bodies

Press and investigations

International bodies

Connected cases

Related matters, and cases linked to this one through the same organisations, with the role each played in both.
Terms used on this page

Law and courts

Arbitration
A private dispute process in which an appointed arbitrator, instead of a court, decides the case.
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