The North Caspian Operating Company (NCOC) has been issued a billion-dollar fine, after it was found to have violated environmental laws at its Kashagan field.
Last spring the Department of Ecology for the Atyrau region, where the field is located, conducted an investigation at Kashagan that uncovered a number of violations of environmental legislation. These include the storage of 1.75m tons of sulfur at the field, twice as much as the permitted 730,000 tons.
NCOC was also found to have failed to implement environmental protection measures, discharged waste water without the necessary permit, and other infringements.
The operator denied all charges, and filed an appeal at a court in Astana to challenge the results of the inspection. After lengthy proceedings the court found that the results of the inspection by the Department of Ecology were legitimate. The judicial panel concluded that restrictions on the volume of sulfur storage annually cannot be considered cumulatively.
NCOC can now either appeal this decision in an international arbitration court, or admit its guilt and pay the state the billion-dollar fine.
