In January 2026, an international arbitration tribunal in London confirmed the main claims of Kazakhstan against the Karachaganak Petroleum Operating consortium – comprising Shell, Eni, Chevron and Lukoil – for costs illegally reimbursed under its production sharing agreement. The compensation figure: between 2 and 4 billion dollars. In its written decision, the court cited Kazakhstan’s own admission that the country had tolerated “corruption and kleptocracy” until 2022. Meanwhile, in The Hague, Kazakhstan pursues a policy $160 billion claim against the Kashagan consortium, alleging that the state received only 2 percent revenue after royalties.
These are important precedents. But behind the figures put forward in London and The Hague lies a human cost which was not mentioned before the Court. Kazakh companies were driven out of business by predatory subcontracting chains, and oil workers spent years doing some of the most dangerous work in the country’s most profitable industry – and received only a fraction of what the contracts above them mandated.
The schemes that defrauded the state and those that defrauded workers were manifestations of the same system. This raises an uncomfortable question about officiating: Who are these victories really for?
Galymbek Mussin is the former director of a small construction company in Atyrau. Between 2016 and 2019, his company supplied workers to the Tengiz oil field, until it went bankrupt – because the contractor above him, Senimdi Kurylys (SK), was collecting more than $15 an hour from Tengizchevroil (TCO) for each worker and only paying back $5 to Mussin. Despite its Kazakh name, SK is not a Kazakh company but a joint venture between the American company Bechtel (50 percent) and the Turkish company ENKA (50 percent ). The $10 gap – money expressly designated by TCO for salaries, housing, food and medical care of Kazakh workers – has evaporated in the contracting chain.
Mussin spent the next seven years writing to all Kazakh state institutions. The prosecutor’s office investigated, confirmed the violations and imposed a fine of 75 million tenge (about $155,000). However, in the end said the question of where the money was going was “beyond his jurisdiction.”
The Karachaganak decision and the Mussin affair are not two separate stories. They are two expressions of the same mechanism: opaque contracts and multi-tiered subcontracting chains, the capture of state surveillance, and the diversion of funds formally intended for others. The difference is only a question of scale and who ended up being the victim: the state’s share of revenue or a worker wearing a safety helmet.
One program, two levels
Tengiz project structure documented in leaked contract documents – Attachment B2 to Main Contractor Services Contract No. 1123955 » – which the Kazakh media Vlast reported in 2024. TCO’s hourly rates are defined as “all-inclusive”. covering all costs associated with keeping a worker on site. SK received them in full. Subcontractors received a third. The prosecution confirmed this – and ended its investigations.
Structurally, this mirrors what was established in the Karachaganak case: contractors submitted inflated invoices and state officials approved them – whether through incompetence or inducement.
The cases of the Italian subcontractors of Karachaganak and Kashagan went further. In 2017, several Italian companies were sentenced by an Italian court to fabricate contracts and invoice the State for work that was never carried out. Documents submitted by Kazakhstan to U.S. courts describe a contract that was amended 11 times, with its value increasing from $88 million to more than $490 million. THE ICIJ investigation into Caspian cabals found that oil majors approved inflated budgets and payments to subcontractors who did not perform the work – in one documented case, authorizesan advance of $48 million for construction that never began.
In Tengiz, none of this has ever been brought to court. Oljas Baidildinov, Kazakh oil analyst publicly noted the gap: TCO’s budget grew from an initial $12 billion to a final $48.5 billion – a quadruple overspend compared to an onshore field with existing infrastructure. KazMunayGas, which owns 20 percent stake in TCO, has not asked any questions publicly.
And discrimination is built into the salary structure itself. TCO Salary Tablereleased in late 2024, divides the workforce into four geographic levels. A manager from the United States or Western Europe earned $192 an hour. A Kazakh manager earned $33.93, less than 18% of salary, for the same role at the same site. The citizens of the country whose subsoil is exploited occupy the lowest rung of this hierarchy. Academic scholarship identifies this as a reproduction of the colonial pay model, where pay depends on country of origin rather than skills or experience. In Kazakhstan’s oil sector, the situation has remained unchanged for two decades.
Bechtel and ENKA – the co-owners of SK – are today build Poland’s first nuclear power plant, build highways in SerbiaAnd delivery of a combined heat and power plant in Hamburg. In Poland and Germany, they must comply with Posted Workers Directivewhich precisely prohibits the geographical salary gap codified in the TCO salary scales, and with the Pay Transparency Directive of 2023, which gives workers the right to information on comparative wages – the same disclosure that got Tengiz workers fired.
After the Janaozen massacre of December 2011 – in which security forces shot dead at least 16 striking oil workers, drawing formal censure from the ILO – the authorities’ response was not to restore workers’ rights but to further restrict them. THE Trade Union Act 2014 and Labor Code 2015documented by Human Rights Watch, eliminated independent unionism: the country’s largest independent union confederation was dissolved by court order in 2017. Workers lost both institutional protection and the right to strike. Vlatest documented dismissals of those who dared to raise the issue publicly. This created the conditions that made the corruption scheme possible.
Arbitration is not reform
It is tempting to view the Karachaganak ruling and The Hague’s assertion as proof that Kazakhstan is changing – that President Kassym-Jomart Tokayev is using the law to restore fairness. But fairness requires consistency. A state that recognizes “corruption and kleptocracy” in a London court while closing the investigation into the missing $10 per hour of work and refusing to investigate TCO’s quadruple budget overrun is not fighting corruption. It uses corruption selectively as a bargaining tool.
The compensation granted will not increase the wages of workers in the oil sector. He will not reimburse Mussin for his lost belongings. This will not restore workers’ right to organize. This will happen through the same opaque structures – like KazMunayGas and public funds – that the Organized Crime and Corruption Reporting Project (OCCRP) and others have documented for two decades.
For foreign investors, this should be interpreted as a warning and not a green light. Chevron is in negotiations to extend the Tengiz concessionwhich expires in 2033, against the backdrop of the Karachaganak precedent. The corruption that oil majors have spent decades seeing as an acceptable cost of doing business in Kazakhstan is now turning against them in an international court.
As Mussin said: “The people of Kazakhstan, as owners of their underground resources, should not suffer from such investors. »
Kazakhstan has learned to name its corruption when it is profitable to do so. What he hasn’t learned – and shows no signs of learning – is to quit. Businesses facing the bill in London and The Hague knew this. They come from countries where what happens in the Kazakh oil fields would be a crime, where labor rights are respected, where courts are independent and where transparency is not optional. They still invested in Kazakhstan, and not out of ignorance. They were too eager for the conditions that only a kleptocracy can provide: no unions to negotiate with, no regulators to satisfy, no workers with the legal authority to file complaints.
They got what they came for – at least for a while. Because in a kleptocracy, no one definitely wins. The system that allows you to extract without accountability is the same system that will eventually extract you.