The Debate | Opinion | Central Asia

Kazakhstan Admitted to Corruption. Nothing Changed.

While the state recovers billions in London and The Hague, oil workers in Kazakhstan still receive a fraction of what they are owed.

In January 2026, an international arbitration tribunal in London upheld Kazakhstan’s core claims against the Karachaganak Petroleum Operating consortium – including Shell, Eni, Chevron, and Lukoil – over unlawfully reimbursed costs under its production-sharing agreement. The compensation figure: between $2 and $4 billion. In its written decision, the tribunal cited Kazakhstan’s own admission that the country had tolerated “corruption and kleptocracy” until 2022. Meanwhile, at The Hague, Kazakhstan is pursuing a $160 billion claim against the Kashagan consortium, alleging that the state received just 2 percent of post-royalty revenue.

These are significant precedents. But behind the figures argued in London and The Hague lies a human cost that was not discussed before the court. Kazakhstani businesses were driven into bankruptcy by predatory subcontracting chains, and oil workers spent years doing some of the most dangerous work in the country’s most profitable industry – and were paid a fraction of what the contracts above them prescribed. 

The schemes that defrauded the state and the schemes that defrauded the workers were manifestations of the same system. That raises an uncomfortable question about the arbitration: who are these victories actually for?

Galymbek Mussin is the former director of a small construction company in Atyrau. Between 2016 and 2019, his firm supplied workers to the Tengiz oil field, until it went bankrupt – because the contractor above him, Senimdi Kurylys (SK), collected over $15 per hour from Tengizchevroil (TCO) for each worker and passed on just $5 to Mussin. Despite the Kazakh name, SK is not a Kazakh company but a joint venture between U.S. firm Bechtel (50 percent) and Turkish firm ENKA (50 percent ). The $10 gap – money expressly designated by TCO for Kazakhstani workers’ wages, housing, food, and medical care – evaporated in the contracting chain. 

Mussin spent the next seven years writing to every institution of the Kazakhstani state. The Prosecutor’s Office investigated, confirmed violations, and issued a fine of 75 million tenge (around $155,000). However, it ultimately declared the question of where the money went to be “outside its competence.” 

The Karachaganak ruling and the Mussin case are not two separate stories. They are two expressions of the same mechanism: opaque contracts and layered subcontracting chains, the capture of state oversight, and the diversion of funds formally designated for others. The difference is only one of scale and of who ended up as the victim: the state’s revenue share, or a worker in a hard hat.

One Scheme, Two Tiers 

The structure of the Tengiz scheme is documented in leaked contract materials – Attachment B2 to Master Contractor Services Contract No. 1123955 – which Kazakh outlet Vlast reported on in 2024. TCO’s hourly rates are defined as “all-inclusive,” covering every cost of maintaining a worker on site. SK received them in full. Subcontractors received a third. The Prosecutor’s Office confirmed as much – and stopped looking into the matter.

Structurally, this is a mirror of what was established in the Karachaganak case: contractors submitted inflated invoices and state officials approved them – whether through incompetence or inducement. 

The Italian subcontractor cases at Karachaganak and Kashagan went further than that. In 2017, several Italian companies were convicted by an Italian court for fabricating contracts and billing the state for work that was never performed. Documents submitted by Kazakhstan to U.S. courts describe one contract that was amended 11 times, its value ballooning from $88 million to over $490 million. The ICIJ’s Caspian Cabals investigation found that oil majors signed off on inflated budgets and payments to subcontractors who did not perform the work – in one documented case authorizing a $48 million advance for construction that never began. 

At Tengiz, none of this has ever reached court. Kazakhstani oil analyst Olzhas Baidildinov has publicly noted the discrepancy: TCO’s budget grew from an initial $12 billion to a final $48.5 billion – a fourfold overrun on an onshore field with existing infrastructure. KazMunayGas, which holds a 20 percent stake in TCO, has asked no questions........

© The Diplomat