Oil giants ignored red flags, enriched elite for Kazakhstan pipe dream

Hundreds of mil­lions in pay­ments were made to a firm co-owned by Timur Kulibayev, son-in-law of the resource-rich nation’s long­time ruler.

Western oil giants had a cash bonan­za in their sights when they gath­ered in the small town of Farnborough, south­west of London, in October 2012. They were rush­ing to exploit one of the world’s rich­est and deep­est oil fields: the 156-square-mile Tengiz reser­voir in west­ern Kazakhstan, more than four times the size of Paris and a mile deep, under a desert on the remote north coast of the Caspian Sea.

Time was slip­ping by on the oil exec­u­tives’ exclu­sive 40-year rights to devel­op the field. They had 21 years left to both extract the oil and build the infra­struc­ture to trans­port it from Tengiz to the 939-mile Caspian pipeline, where the oil would be export­ed through Russia and on to world markets.

But the rich­es lay beneath one of the most polit­i­cal­ly and envi­ron­men­tal­ly sen­si­tive spots on Earth, where tem­per­a­tures soar to 130 degrees in sum­mer and sink to 30 below zero in win­ter. A coun­try set­tled by nomadic tribes, where guests are still wel­comed with camel’s milk, Kazakhstan has a pop­u­la­tion that includes a large minor­i­ty of Slavs who migrat­ed south across the 4,500-mile Russian-Kazakh bor­der, and Russia has been a dom­i­nant influ­ence there since the tsars. The oil itself is deep under the frag­ile area known as the Caspian Depression, home to an ecosys­tem of migra­to­ry birds, stur­geon, her­ring and oth­er rare fauna.

The oil com­pa­nies lis­tened as rep­re­sen­ta­tives of a lit­tle-known Kazakh firm called TenizService pitched an idea to build a trans­porta­tion route and offload­ing facil­i­ty to speed removal of the oil by near­ly dou­bling the vol­ume that could be shipped by pipeline to the near­est nav­i­ga­ble sea­port in Russia. Back in 2009, Chevron and its part­ners had reject­ed a sim­i­lar idea because of safe­ty and envi­ron­men­tal risks.

The mas­sive infra­struc­ture project seemed impos­si­ble: The Caspian Sea is land­locked and impass­able in win­ter, and the oil reser­voir was about 1,000 miles from the near­est usable sea­port. Floating docks would need to be built. Asphalt roads would need to be paved. A 43-mile marine chan­nel, able to accom­mo­date ves­sels from tugs to barges, would need to be dredged.

The approval process was huge­ly com­plex, requir­ing sign-off from no less than 170 offi­cials across 46 Kazakh enti­ties, from local water offi­cials to the Ministry of Transport.

These intim­i­dat­ing obsta­cles didn’t faze TenizService, which got the con­tract as the lone bid­der. In a 52-slide pre­sen­ta­tion of pho­tos, maps and schemat­ic draw­ings, the com­pa­ny pro­posed a way to win a con­struc­tion per­mit in a mat­ter of months, cit­ing its “good rela­tions” with the government.

Despite enor­mous reg­u­la­to­ry hur­dles, the project to build the offload­ing facil­i­ty — with a price tag of $1.06 bil­lion — moved for­ward with pre­lim­i­nary work with­in a month. Chevron, ExxonMobil Corp. and two oth­er part­ners approved a deal that would ulti­mate­ly pay TenizService $1.5 bil­lion beyond the orig­i­nal cost of the no-bid con­tract, for a total of $2.5 billion.

TenizService, the Kazakh firm nav­i­gat­ing the hur­dles that had stymied Western oil giants for years, had been part­ly owned until 2010 by the “oil prince”: Timur Kulibayev, the bil­lion­aire son-in-law of Kazakhstan’s pres­i­dent at the time. It was in the hands of a busi­ness asso­ciate when the con­tract was award­ed, and would soon receive a finan­cial life­line from a bank in which Kulibayev held a large stake.

Through his father-in-law Nursultan Nazarbayev, who ruled petro­le­um-rich Kazakhstan for near­ly 30 years, Kulibayev had ready access to the levers of oil pow­er — pow­er which could help oil com­pa­nies, Nazarbayev and, ulti­mate­ly, Russian President Vladimir Putin.

Despite inter­nal warn­ings that the con­tracts could be seen as includ­ing improp­er pay­ments to polit­i­cal­ly influ­en­tial actors, Chevron, Exxon and three oth­er Western oil giants approved finan­cial deal­ings with com­pa­nies linked to Kulibayev. The deals with these firms were part of a broad­er push by Western oil com­pa­nies to court polit­i­cal­ly con­nect­ed con­trac­tors and secure a route to export oil from Kazakhstan, through Russia, to world markets.

Kulibayev’s con­nec­tions to TenizService are part of Caspian Cabals, an inves­ti­ga­tion led by the International Consortium of Investigative Journalists and 26 media part­ners into the rise of a crit­i­cal pipeline in the Caspian Sea region and Kazakh oil fields that feed it. The two-year inves­ti­ga­tion is based on tens of thou­sands of pages of con­fi­den­tial emails, com­pa­ny pre­sen­ta­tions and oth­er oil indus­try records, audits, court doc­u­ments and reg­u­la­to­ry filings,as well as hun­dreds of inter­views, includ­ing with for­mer com­pa­ny employ­ees and insid­ers. Caspian Cabals shows how Western oil com­pa­ny mon­ey has empow­ered anti-demo­c­ra­t­ic actors in Kazakhstan, bol­stered Putin’s regime and enriched region­al elites.

Western con­sumers and oil com­pa­nies are increas­ing­ly depen­dent on the Caspian region. For decades, U.S. for­eign pol­i­cy and high-pow­ered lob­by­ists pro­mot­ed the idea that resource-rich Kazakhstan would help to wean the U.S. from depen­dence on Middle Eastern oil — while wrest­ing the Central Asian nation from Russia’s influ­ence and expand­ing democ­ra­cy in the region.

Caspian Cabals: Key findings

The Caspian Cabals inves­ti­ga­tion reveals how Western oil com­pa­nies — includ­ing Chevron Corp., ExxonMobil Corp., Shell PLC, and Italy’s Eni S.p.A. — ignored bribery risks and mas­sive cost over­runs to secure their stake in a crit­i­cal Kazakhstan-Russia pipeline, only to be side­lined by the Kremlin. Here are sev­en key find­ings from our reporting.Read more 

Instead, the Caspian projects embold­ened Russia and have come at grave envi­ron­men­tal cost to Kazakhstan — gen­er­at­ing dis­con­tent, anger and dis­ap­point­ment among some of its citizens.

“Fossil fuel devel­op­ment in west­ern Kazakhstan has been dev­as­tat­ing to local com­mu­ni­ties, both in terms of envi­ron­men­tal health impacts and destruc­tion of the nat­ur­al world,” said Kate Watters, exec­u­tive direc­tor of Crude Accountability, an advo­ca­cy group spe­cial­iz­ing in envi­ron­men­tal pro­tec­tion of the Caspian Sea. “Children have grown up in the shad­ow of oil and gas devel­op­ment, and have paid the price with their health, despite claims by cor­po­ra­tions and inter­na­tion­al finan­cial insti­tu­tions that envi­ron­men­tal and social stan­dards are upheld.”

Leila Nazgul Seiitbek, founder of Freedom for Eurasia, placed some of the blame on Kulibayev.  Her advo­ca­cy group inves­ti­gat­ed him and asked the U.S. to apply sanc­tions to pun­ish him for alleged cor­rup­tion. “Rarely does any­one bear any respon­si­bil­i­ty in projects where there are inter­ests of the polit­i­cal klep­to­crat­ic elite,” she said. “Of course to the extent that Kulibayev has an inter­est in any project, that plays a role in ensur­ing impuni­ty. Projects with his par­tic­i­pa­tion are gen­er­al­ly not avail­able for civil­ian or law enforce­ment control.”

Kulibayev declined ICIJ’s requests for an interview.

His U.K. law and com­mu­ni­ca­tions firm, Schillings, said Kulibayev is an inde­pen­dent­ly wealthy busi­ness­man and investor, with his own busi­ness inter­ests and a proven com­mer­cial track record.

In a 39-page let­ter to ICIJ’s lawyers, Schillings acknowl­edged Kulibayev had an indi­rect, minor­i­ty stake in TenizService until 2010 but no inter­est in the com­pa­ny when the giant infra­struc­ture con­tract was award­ed two years later.

“Mr. Kulibayev has nev­er had a monop­oly over the oil indus­try in Kazakhstan,’’ the law firm said. “He was influ­en­tial due to his promi­nent roles in the sec­tor, but he by no means con­trolled it.”

Schillings cred­it­ed the vast wealth of Kulibayev and his wife Dinara Kulibayeva to their busi­ness acu­men, not to their unique access to her father, the for­mer pres­i­dent of Kazakhstan, or the high­est reach­es of gov­ern­ment and industry.

“They made their mon­ey with­out any sup­port from the state,” Schillings said. “Mr. Kulibayev has nev­er engaged in bribery or cor­rup­tion or engaged nom­i­nees to act on his behalf in con­nec­tion with the oil and gas indus­try in Kazakhstan or otherwise.’’

Today the 58-year-old Kulibayev sits atop an empire of more than 220 com­pa­nies and trusts in 22 coun­tries, includ­ing 10 secre­cy havens. He and his wife lead the list of the rich­est Kazakhs, with a com­bined for­tune of $10 bil­lion, accord­ing to Forbes.

As Caspian Cabals shows, he and his fam­i­ly poured mon­ey into man­sions across Europe, art­work, a pri­vate jet, mil­lion-dol­lar par­ties and enti­ties reg­is­tered in mul­ti­ple countries.The com­pa­nies reg­is­tered in the off­shore secre­cy havens have bought a dizzy­ing array of busi­ness­es — farm­ing com­pa­nies, a med­ical clin­ic, real estate out­fits, oil and gas ser­vice firms, a high-end mer­chan­dis­er and golf resorts.

In a 2017 Italian cor­rup­tion case, a busi­ness­man named Agostino Bianchi plead­ed guilty to brib­ing three Kazakh offi­cials, includ­ing Kulibayev, to get pub­lic con­tracts that net­ted Bianchi a $7 mil­lion prof­it, accord­ing to doc­u­ments shared by ICIJ part­ner L’Espresso. A judge in Monza, near Milan, con­fis­cat­ed those illic­it pro­ceeds. The busi­ness­man got a 16-month sen­tence with sus­pend­ed jail time. Kulibayev was not charged. His lawyers said Kulibayev was unaware of the case and he denied hav­ing received pay­ments from Bianchi or ever engag­ing in bribery.

With access to Kazakhstan’s oil fields, Western lead­ers hoped to reduce their reliance on Middle East oil and forge rela­tion­ships that could bring democ­ra­cy to Kazakhstan. As Caspian Cabals shows, how­ev­er, the Western oil deals helped boost a klep­toc­ra­cy and Putin’s Russia.

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The making of an ‘oil prince’

Kulibayev was well-groomed to nav­i­gate pol­i­tics. He was born into pow­er, the son of a Soviet-era Communist Party boss, Askar Kulibayev. His moth­er, a school­teacher named Raisa,  was trained as a biol­o­gist. His father held the top par­ty job in the west­ern Kazakh oil region of Atyrau. In the 1970s, his father’s posi­tion meant that as Timur grew up he enjoyed goods and ser­vices in short sup­ply — and could sum­mon a car any­time from the Central Committee garage.

After attend­ing an elite high school, Kulibayev stud­ied eco­nom­ics in Moscow at one of the country’s most pres­ti­gious uni­ver­si­ties. He moved in the same social cir­cles as Dinara Nazarbayeva, the mid­dle daugh­ter of the future Kazakh pres­i­dent, who was also study­ing in Moscow. They mar­ried around the time the Kazakh Supreme Soviet elect­ed her father the country’s first pres­i­dent in 1990, a post he would hold for the next 29 years.

The fall of the Soviet Union in 1991 brought oppor­tu­ni­ties for both Western oil com­pa­nies and Kulibayev. Western gov­ern­ments were pro­mot­ing com­merce in new­ly inde­pen­dent coun­tries, and Kazakhstan’s vast petro­le­um reserves offered an irre­sistible option away from their fraught depen­dence on Middle Eastern oil. Chevron would become the first for­eign ener­gy com­pa­ny to enter Kazakhstan.

Kulibayev, 25 in 1991, plunged into a cor­po­rate career, hon­ing his finance skills at an invest­ment firm.

Soft-spo­ken and savvy, the entre­pre­neur assem­bled an elab­o­rate and endur­ing net­work of friends and busi­ness part­ners. Along with his front-row access to gov­ern­ment lever­age, this net­work would even­tu­al­ly help him acquire stakes in the country’s bank­ing and gold busi­ness­es, tele­com, oil fields, pipeline con­struc­tion and oth­er industries.

By 1997, Timur and Dinara, now par­ents to a son, lived in a pres­ti­gious apart­ment build­ing in Almaty, the nation’s most pop­u­lous city. According to a neigh­bor, exiled oppo­si­tion fig­ure and for­mer banker Mukhtar Ablyazov, the four-sto­ry build­ing was occu­pied most­ly by state offi­cials who often paid noth­ing or below mar­ket price for their units.. “It was the most expen­sive and best prop­er­ty in Almaty,” Ablyazov, who lat­er became an ene­my of Kulibayev after pub­licly accus­ing the president’s son-in-law of accept­ing bribes, told ICIJ. After he helped found an oppo­si­tion move­ment, a Kazakh court con­vict­ed Ablyazov in 2017 of embez­zle­ment and relat­ed offens­es, and a UK court found him guilty of crim­i­nal con­tempt. Ablyazov, who denies the alle­ga­tions, is want­ed in Russia, Kazakhstan and the UK.

Nazarbayev, mean­while, struck deals with Western oil com­pa­nies. He signed agree­ments with Chevron and oth­ers for the devel­op­ment of the Caspian pipeline and rights to the giant fields that would feed it. The first con­tract was for Tengiz, signed in 1993 for a term of 40 years. It estab­lished a joint ven­ture com­pa­ny called Tengizchevroil to oper­ate the Tengiz oil field. Chevron became the dom­i­nant Western share­hold­er with its 50% stake. Exxon, with a 25% share, would become the sec­ond biggest own­er. Nazarbayev planned to bring in investors to con­struct the pipeline to ship the oil — not only from Tengiz but also from oth­er big Kazakhstan fields called Kashagan and Karachaganak.

The pipeline’s oper­at­ing com­pa­ny was named the Caspian Pipeline Consortium. Chevron owned 15% of the con­sor­tium, Exxon 7.5%; Shell about 3.7%, Eni 2% and BG Group 2%. The Russian gov­ern­ment would even­tu­al­ly become the largest share­hold­er in the Caspian Pipeline with an ini­tial 24% stake.

Others

com­pa­nies

CPC

Russian

gov­ern­ment

Kazakh

gov­ern­ment

Western

com­pa­nies

Chevron

Shell

Eni

Transneft

KazMunayGas

Lukoil

Rosneft

Exxon

15%

7.5%

7.4%

2%

31%

20.8%

12.5%

3.8%

% of shares held by companies

With these deals, Nazarbayev began to cre­ate Kazakhstan’s oil and gas bureau­cra­cy. Meanwhile, his son-in-law joined the gov­ern­ment, work­ing under Nurlan Balgimbayev, a one-time Chevron con­sul­tant, in dif­fer­ent top Kazakh oil posts.

In time, Kulibayev would come to own stakes in pri­vate­ly held firms that once were state-owned, includ­ing Halyk Bank, which would even­tu­al­ly become Kazakhstan’s largest bank. His stake in the bank and oth­er for­mer state assets were acquired as he moved in and out of high-rank­ing gov­ern­ment jobs, includ­ing vice pres­i­dent of KazakhOil and pres­i­dent of KazTransOil, both state-owned. Then, via pres­i­den­tial decree, he became vice chair­man of the new state hold­ing com­pa­ny KazMunayGas, or KMG.

Schillings said in its response to ques­tions from ICIJ that although Kulibayev was part of KMG’s senior man­age­ment team respon­si­ble for over­all strat­e­gy, he “had no uni­lat­er­al influ­ence on KMG’s deci­sion-mak­ing process.”

The lawyers acknowl­edged that Kulibayev held gov­ern­ment posi­tions and pur­sued pri­vate busi­ness inter­ests “in par­al­lel for a peri­od of time.”

“Kazakh law allowed pub­lic offi­cials to have out­side busi­ness inter­ests, so there was noth­ing improp­er or unlaw­ful about Mr. Kulibayev’s activ­i­ties,” Schillings said.

His pri­vate empire grew: A small cir­cle of asso­ciates and allied busi­ness­men helped man­age a web of oper­at­ing and shell com­pa­nies that fre­quent­ly looped back to Kulibayev, Caspian Cabals doc­u­ments show.

While he nev­er met Kulibayev, attor­ney Ruslan Tsarni said that dur­ing his work in Kazakhstan he act­ed for rep­re­sen­ta­tives of “an orga­nized band of indi­vid­u­als head­ed by Timur Kulibayev,” which Tsarni called “The Group,” accord­ing to a 2010 state­ment to Ablyazov’s U.K. attor­neys in a fraud case brought by BTA Bank against Ablyazov, its for­mer chair­man, in the London High Court.

One alleged mem­ber of the so-called Group was Arvind Tiku, 54, who was “sub­or­di­nate and ‘junior part­ner’ of Kulibayev in some projects,” Tsarni said in a writ­ten state­ment to ICIJ. An Indian-born bil­lion­aire, Tiku helped Kulibayev buy Prince Andrews’ Sunninghill coun­try estate in 2007, accord­ing to press reports. The house stood emp­ty for years.

In their emailed response, the lawyers for Kulibayev said he pur­chased Sunninghill Park in a “com­mer­cial, arm’s length trans­ac­tion” and as part of a com­pet­i­tive bid­ding process.“ Kulibayev did not use Tiku to mask Kulibayev’s involve­ment in com­mer­cial trans­ac­tions, they said, adding that the two men “have been occa­sion­al, trans­par­ent busi­ness partners.”

In a 2021 video inter­view with the Swiss news­pa­per NZZ (Neue Zürcher Zeitung) Tiku said he had pri­or busi­ness inter­ests with Kulibayev but denied he had done any­thing wrong. “Do I know Kulibayev? No doubt I know him,” Tiku said. “Have I done busi­ness with him? Yes. Do I still do busi­ness with him? No.”

In a state­ment to ICIJ, Carter-Ruck, a U.K. law firm rep­re­sent­ing Tiku, said the busi­ness­man had no cur­rent busi­ness rela­tion­ship with Kulibayev and nev­er took orders from him. The law firm said Tiku pro­vid­ed Kulibayev’s com­pa­ny with $16 mil­lion (£8 mil­lion) to acquire the Sunninghill Park prop­er­ty and that the loan and inter­est were repaid in full in 2010.

Another mem­ber of Kulibayev’s cir­cle, Aidan Karibzhanov, found­ed an invest­ment firm called Visor Investment Solutions. He helped design a process to pri­va­tize state assets as a mem­ber of Kulibayev’s exec­u­tive team at KazMunayGas. In a 2021 affi­davit filed in fed­er­al court in New York, Karibzhanov’s for­mer wife, Makhpal Karibzhanova, said her ex-hus­band used nom­i­nees, or prox­ies as own­ers, and pur­sued oil and gas pri­va­ti­za­tion deals whose prof­its were chan­neled through off­shore entities.

“Mr. Kulibayev and Mr. Karibzhanov have crossed paths to a lim­it­ed extent in their pro­fes­sion­al careers,” Schillings said in its state­ment. “These con­nec­tions are transparent.”

Karibzhanov did not respond to mul­ti­ple requests for com­ment from ICIJ, but he  said in an affi­davit filed in his for­mer wife’s New York case that he had “no mate­r­i­al finan­cial con­nec­tion” to the pri­va­ti­za­tion of oil and gas fields in Kazakhstan. He also  denied gain­ing own­er­ship of assets through nom­i­nees or straw men.

In a 2013 Facebook post repub­lished in Forbes, Karibzhanov said that while “often Visor is count­ed as belong­ing to Timur Kulibayev,” they were part­ners in only two ear­ly projects. He denied Kulibayev was a Visor shareholder.

Schillings said Kulibayev had only a dis­tant, indi­rect con­nec­tion to Visor and had no con­trol over the firm or its invest­ment activ­i­ties. He had been an indi­rect share­hold­er in a com­pa­ny that Visor invest­ed in, the law firm said, and a Visor affil­i­ate had pur­chased a Halyk Bank sub­sidiary ear­li­er this year.

“Mr. Kulibayev does not own Visor, either direct­ly or indi­rect­ly,” Michael McNicholas, gen­er­al coun­sel for the Visor Group, wrote in an email response to inquiries by ICIJ.  Referring specif­i­cal­ly to Visor International DMCC, he said it was owned by six indi­vid­u­als “who have nev­er held, nor cur­rent­ly hold” an equi­ty inter­est on behalf of Kulibayev. He declined to pro­vide the names of the owners.

In 2003, U.S. pros­e­cu­tors indict­ed a con­sul­tant to Nazarbayev in a mas­sive bribery case. They accused the American busi­ness­man James H. Giffen and his mer­chant bank, Mercator, of pass­ing $78 mil­lion in bribes — and mil­lions of dol­lars in jew­el­ry, furs, speed­boats and snow­mo­biles, tuition and vaca­tions — from U.S. oil com­pa­nies to two unnamed, unin­dict­ed co-con­spir­a­tors who have been pub­licly iden­ti­fied as Nazarbayev and his top lieu­tenant Balgimbayev.

“Kazakhgate,” as the case became known, cen­tered on trans­ac­tions between Mercator and Mobil Oil Corp., which became part of Exxon. Neither Exxon nor any oth­er oil com­pa­ny was charged. Kulibayev wasn’t impli­cat­ed; Giffen plead­ed guilty to a  tax-relat­ed mis­de­meanor. The judge declined to sen­tence Giffen to prison after he tes­ti­fied that he act­ed with sup­port from the U.S. Central Intelligence Agency and the White House to help advance American inter­ests in the region.

Meanwhile, State Department cables pub­lished by WikiLeaks would reveal that Kulibayev was in reg­u­lar con­tact with U.S. gov­ern­ment offi­cials, pro­vid­ing infor­ma­tion on top­ics rang­ing from the impor­tance of the Caspian pipeline expan­sion and poten­tial oil routes through Iran and China to Western com­pa­nies’ bids for an oil block — a des­ig­nat­ed area for oil and gas explo­ration and pro­duc­tion — and China’s grow­ing impor­tance in the region. Diplomats gushed over him, prais­ing his “grace of a states­man,” accord­ing to a WikiLeaks cable.

In con­trast to the glow­ing views of some diplo­mats, oil indus­try insid­ers com­plained bit­ter­ly about the per­ils of doing busi­ness under the Nazarbayev regime, accord­ing to diplo­mat­ic cables obtained by WikiLeaks. At a March 2005 focus group of oil­men with the U.S. ambas­sador in Almaty, one exec­u­tive crit­i­cized “elite cor­rup­tion” and called out alle­ga­tions about the president’s son-in-law. “Kulibayev and his ilk prey on for­eign­ers and locals alike,” he said.

Another diplo­mat­ic cable, sent to numer­ous U.S. gov­ern­ment agen­cies, revealed a Kazakh oilman’s more col­or­ful descrip­tion: “Like a Buddha with a Paris man­i­cure,” he said of Kulibayev, with an “avarice for large bribes.”

On behalf of Kulibayev, Schillings flat­ly denied the com­ment, adding that the oil­man had a griev­ance against Kulibayev.

Under a veil

By 2007, Kulibayev had joined the ranks of the ultra-rich, appear­ing on the Forbes bil­lion­aires list for the first time. The Sunninghill Park estate in Berkshire that Arvind Tiku helped Kulibayev obtain was one of six prop­er­ties total­ing around $184 mil­lion that Kulibayev’s net­work of com­pa­nies pur­chased in the U.K. that year, ICIJ’s inves­ti­ga­tion has found. Three of these were in Mayfair — the glam­orous London neigh­bor­hood dot­ted with five-star hotels and Michelin-starred restaurants.

Kulibayev pur­chased two oth­er London prop­er­ties in an area of Kensington known as “Millionaire’s Row” in 2007 for $54.5 mil­lion. Those assets were placed in a Cayman Islands trust.

Around the same time, accord­ing to Caspian Cabals doc­u­ments, Kulibayev and his asso­ciates bought real estate through com­pa­nies reg­is­tered in secre­cy juris­dic­tions — includ­ing the Bahamas and the British Virgin Islands. He and mem­bers of his inner cir­cle also cre­at­ed com­pa­nies in the United Kingdom, the Netherlands, Spain, Luxembourg and oth­er European coun­tries to buy real estate and man­age Kulibayev’s cor­po­rate holdings.

During this fast and furi­ous buy­ing spree, gov­ern­ment offi­cials in Switzerland and Kazakhstan report­ed­ly inves­ti­gat­ed pos­si­ble wrong­do­ing by Kulibayev and oil indus­try play­ers — although nei­ther went for­ward because, Kulibayev’s lawyers said, they could find no evi­dence against him. Even under scruti­ny, Kulibayev’s influ­ence with­in Kazakhstan grew, help­ing turn the coun­try into a world ener­gy power.

In 2008, President Nazarbayev appoint­ed Kulibayev to anoth­er promi­nent gov­ern­ment post: deputy chair­man of the country’s new­ly cre­at­ed $80 bil­lion nation­al wealth fund, Samruk-Kazyna, named after a bird in a Kazakh folk sto­ry that lays gold­en eggs and brings luck.

Meanwhile, the gov­ern­ment demand­ed oil com­pa­nies pay up — in pres­sure cam­paigns that took the form of what indus­try exec­u­tives described in pri­vate dis­cus­sions with U.S. diplo­mats as spu­ri­ous tax charges, demands for dis­counts on raw mate­ri­als for local refiner­ies, envi­ron­men­tal fines, increased tar­iffs and reim­burse­ment for what the gov­ern­ment said were ille­gal rev­enues from overproduction.

Two Chevron exec­u­tives told the American ambas­sador to Kazakhstan in 2008 that the com­pa­ny was fac­ing out­ra­geous fee demands. “Chevron views as unac­cept­able new fees,” reads a leaked State Department cable. Still, the cable made clear, the com­pa­ny would con­tin­ue to invest in the oil fields because “they affirmed that Tenghiz con­tin­ues to be extreme­ly pro­duc­tive (and profitable).”

Executives at Chevron-led Tengizchevroil, Exxon and oth­er ener­gy com­pa­nies host­ed events for KazEnergy, the trade group led by Kulibayev that pushed for envi­ron­men­tal, tax and oth­er rules in Kazakhstan favor­able to the indus­try. One of the Chevron exec­u­tives social­ized with Kulibayev, too, a Kazakhstan oil­man told U.S. diplo­mats in 2008, accord­ing to a WikiLeaks cable, in loca­tions rang­ing from a golf course in Astana, Kazakhstan’s cap­i­tal, to a beach in Spain.

No Chevron exec­u­tive ever pro­vid­ed Kulibayev with “any­thing of val­ue (bribes, favours or any­thing else),” his law firm wrote, ques­tion­ing the accu­ra­cy of the Wikileaks cables.

In U.S. gov­ern­ment cir­cles, diplo­mats cir­cu­lat­ed uncon­firmed reports that Kulibayev may have received kick­backs over ener­gy deals involv­ing China – an alle­ga­tion his lawyers denied. In the words of anoth­er cable, he was “behind” traders charg­ing oil com­pa­nies exor­bi­tant prices to ship oil. His 2011 appoint­ment to the board of the Russian state oil com­pa­ny Gazprom — as the only non-Russian — was seen as a sign of his grow­ing polit­i­cal stature.

Despite the red flags, Chevron and its part­ners award­ed oil con­tracts to busi­ness­es linked to Kulibayev, ICIJ has found. Among the deals: a 2011 con­tract from the Caspian Pipeline Consortium, whose share­hold­ers include Chevron and Exxon, to build two pump­ing sta­tions in Kazakhstan.

The win­ning con­trac­tor to build the pump­ing sta­tions was KazStroyService. Public records show that the pri­vate equi­ty firm Kulibayev con­trols, Singapore-based Steppe Capital, list­ed KazStroyService among its hold­ings as ear­ly as 2010.

KazStroyService did not respond to repeat­ed requests for com­ment, nor did the Caspian Pipeline Consortium or Exxon. Chevron did not respond to ques­tions about the KazStroyService contract.

• Recommended read­ing

BROKEN PROMISES

The lost village: Western oil companies enriched Kazakhstan’s power brokers — and left a community in ruins

Nov 22, 2024

INTERACTIVE

Uncovering Timur Kulibayev’s European property empire

Nov 22, 2024

CASPIAN CABALS

Putin’s pipeline: How the Kremlin outmaneuvered Western oil companies to wrest control of vast flows of Kazakhstan’s crude

Nov 22, 2024

Kulibayev’s lawyers said Kulibayev acquired a 50% stake in KazStroyService in June 2007, but was not involved in the company’s man­age­ment or con­tract dis­cus­sions. And Kulibayev “was nev­er involved in the man­age­ment of CPC”, the lawyers said, adding that nei­ther Kulibayev nor Steppe Capital played a role in the pump­ing sta­tions project or CPC’s award­ing of the pipeline con­tract to KazStroyService.

“He has nev­er sought to hide his com­mer­cial under­tak­ings or improp­er­ly ben­e­fit from them,” Schillings said.

In fact, the lawyers said, Kulibayev pro­vid­ed “com­pre­hen­sive doc­u­men­ta­tion at the request of sev­er­al KasStroyService investors and oth­er part­ners” to avoid any poten­tial con­flict of inter­est as he part­ly owned the com­pa­ny and had roles at state-owned entities.

The bills for the pump­ing sta­tions job KazStroyService won sky­rock­et­ed over time. The pro­ject­ed cost to build the two pump­ing sta­tions had been $276.5 mil­lion, but it bal­looned to $486 mil­lion, exclud­ing tax, doc­u­ments show.

As the project’s price tag rose, the Caspian Pipeline Consortium issued 15 change orders.  But paper­work for those amend­ments reviewed by ICIJ pro­vid­ed only per­func­to­ry jus­ti­fi­ca­tion for the increas­es; many sim­ply cit­ed the need for “addi­tion­al” work. Some of the weld­ing work was defec­tive and need­ed to be redone, accord­ing to an inter­nal Caspian pipeline pub­li­ca­tion and an inter­nal contractor’s progress report.

The work dragged on. The pipeline con­sor­tium ini­tial­ly said the job would take 2½ years. It was fin­ished 6½ years lat­er, in 2017 — four years behind schedule.

Kulibayev’s lawyers blamed the delays on numer­ous design changes by CPC and oth­er dif­fi­cul­ties not the fault of KazStroyService. Changes and cost over­runs are com­mon on such megapro­jects, they said, adding that nei­ther Kulibayev nor Steppe Capital was involved in any dis­cus­sions about weld­ing work, change orders, or any oth­er part of the con­tract discussions.

While both the project’s time­line and cost swelled, Kulibayev and his net­work con­tin­ued to bankroll their lav­ish lifestyles. Kulibayev spent near­ly $1.6 mil­lion on just some of the expens­es for sum­mer hol­i­days and his wife Dinara’s birth­day cel­e­bra­tion at the couple’s home in Lloret de Mar, Spain, called Can Juncadella. A Kulibayev-owned jew­el­ry com­pa­ny, Viled, host­ed an exhi­bi­tion in Barcelona attend­ed by wealthy vaca­tion­ers and fam­i­ly friends of the Kulibayevs. According to doc­u­ments reviewed by ICIJ that list the jew­el­ry along­side the names of clients inter­est­ed in buy­ing them, Kulibayev’s wife expressed inter­est in buy­ing more than $6.7 mil­lion worth of jew­el­ry, includ­ing heart-shaped dia­mond ear­rings and a pink sap­phire pen­dant sur­round­ed by round and pear-shaped diamonds.

Meanwhile, Nazarbayev was rebuild­ing Astana as an entire­ly new cap­i­tal city, com­plete with a gold­en imprint of his hand at the top of the 318-foot tall Bayterek (“tree of life”) Tower — a tes­ta­ment to a despot tight­en­ing his grip on pow­er. He severe­ly restrict­ed press free­dom, cracked down on polit­i­cal oppo­nents and signed an amend­ment to the con­sti­tu­tion giv­ing him the right to run for pres­i­dent in perpetuity.

The increas­ing wealth of elites cre­at­ed a sharp con­trast to the lives of the work­ing class, which strug­gled with low wages, poor ben­e­fits and dan­ger­ous work­ing con­di­tions. Efforts to form trade unions failed. Activists and jour­nal­ists were attacked or jailed.

Saulesh Yessenova, an anthro­pol­o­gist at the University of Calgary in Canada who inves­ti­gat­ed work­ing con­di­tions at the Tengiz field, told ICIJ that the 1993 agree­ment between Chevron and the gov­ern­ment of Kazakhstan grant­i­ng the American com­pa­ny rights to devel­op the huge field was one cause of work­er dis­con­tent. The con­tract grant­ed the gov­ern­ment bonus­es, tax­es, roy­al­ties and eco­nom­ic devel­op­ment projects, but the terms were secret.

According to Yessenova’s research, the gov­ern­ment would receive 80% of the prof­its and a $450 mil­lion “sig­na­ture” bonus. But $420 mil­lion would be with­held until after the Caspian pipeline was built. Perhaps more impor­tant, the gov­ern­ment was for­bid­den from reveal­ing infor­ma­tion about the con­tract. The secre­cy of the pro­vi­sions “seri­ous­ly obstruct[ed] demo­c­ra­t­ic process­es” in Kazakhstan, Yessenova said.

Domestic unrest led to mass protests. In December 2011, gov­ern­ment secu­ri­ty forces in the oil town of Zhanaozen sprayed bul­lets on unarmed res­i­dents and strik­ing oil work­ers protest­ing poor wages and work­ing con­di­tions, killing 17.

At a pub­lic forum two months ear­li­er, attend­ed by oil­men, politi­cians and oth­ers, Kulibayev blamed years of unrest on an over­pop­u­la­tion of migrant work­ers. “Zhanaozen should have been closed for migrants long ago because the town’s social infra­struc­ture is not capa­ble of accom­mo­dat­ing so many peo­ple,” he said.

Complaining that sub­or­di­nates had kept him in the dark, President Nazarbayev fired his son-in-law as head of the sov­er­eign wealth fund for alleged­ly bungling the oil work­er strike. Afterward, Kulibayev kept a low pub­lic pro­file. Behind the scenes he con­tin­ued to act as a gate­keep­er for the oil indus­try through his lead­er­ship of the trade group KazEnergy, made up of every major oil com­pa­ny in the coun­try. In diplo­mat­ic cir­cles Kulibayev had been dubbed “the Hydrocarbon Richelieu,” a ref­er­ence to the famed 17th-cen­tu­ry French car­di­nal and pow­er behind the monarchy.

As mem­bers of the Chevron-led Tengiz con­sor­tium searched for a path to max­i­mize their Kazakhstan invest­ment, they would soon look to a com­pa­ny famil­iar to Kulibayev: TenizService.

‘All roads lead to TK’

With the expan­sion of the Caspian pipeline under­way, Chevron and its part­ners sought to dra­mat­i­cal­ly increase the amount of oil they could feed the pipeline by kick­start­ing pro­duc­tion at the Tengiz field — lead­ing to the October 2012 meet­ing out­side London. TenizService rep­re­sen­ta­tives pre­sent­ed their plan to speed up the per­mit­ting process by rely­ing on what they called the firm’s “good rela­tions” with the gov­ern­ment. “TS expe­ri­ence will guar­an­tee get­ting approval for Project Execution of state author­i­ties in time,” the pre­sen­ta­tion said.

To get the oil out, Chevron and its part­ners would under­take a cost­ly project lit­tered with ques­tion­able pay­ments, poten­tial con­flicts of inter­est and off­shore com­pa­nies that obscured the own­ers’ iden­ti­ties, accord­ing to Caspian Cabals documents.

One of those opaque com­pa­nies was TenizService. Partly pri­va­tized by the gov­ern­ment in 2003 — with the help of Kulibayev’s one-time busi­ness asso­ciate and for­mer KazMunayGas col­league, Aidan Karibzhanov, whose pri­vate equi­ty firm Visor part­ly owned TenizService — TenizService devel­oped rock-load­ing, waste man­age­ment, fire response and marine fuel­ing facil­i­ties and pro­vid­ed logis­tics ser­vices to Western companies.

Karibzhanov did not respond to mul­ti­ple requests for com­ments. Schillings said Kulibayev played no role in the par­tial pri­va­ti­za­tion of TenizService.

An orga­ni­za­tion­al chart includ­ed as an exhib­it in the Ablyazov civ­il fraud case in London puts “TK” atop a struc­ture of com­pa­nies, includ­ing one busi­ness the chart says is “held in name of Visor Investments.”

“It is well known in the Kazakhstan busi­ness com­mu­ni­ty that Visor was and is owned and con­trolled by Kulibayev through front men, includ­ing Karibzhanov,” accord­ing to attor­ney and for­mer insid­er Ruslan Tsarni’s 2010 state­ment in the London case.

Asked about the state­ment, Tsarni told ICIJ that he did not know Karibzhanov, nev­er worked for Visor and had no first hand knowl­edge but “it was broad­ly known then that Karibzhanov is ‘Kulibayev ‘s guy.’”

Schillings dis­put­ed Tsarni’s accounts, claim­ing he can­not be con­sid­ered cred­i­ble or an inde­pen­dent wit­ness because of his con­nec­tions with the case of Ablyazov, the con­vict­ed banker, whom the law firm claimed was spread­ing false infor­ma­tion and was part of a  “sus­tained cam­paign” against Kulibayev.

The London court reject­ed Ablyazov’s case and award­ed a $4.9 bil­lion judg­ment against him, Schillings said. The court found Ablyazov guilty of con­tempt of court for con­ceal­ing illic­it assets and issued a 22-month prison sen­tence.  France grant­ed Ablyazov polit­i­cal asy­lum, then lat­er revoked it but has yet to enforce the revocation.

Kulibayev “has nev­er owned, man­aged or con­trolled any Visor funds,” Schillings said, nor did he have any direct or indi­rect inter­est or con­trol in any oth­er Visor entity.

A con­fi­den­tial sup­pli­ers’ ques­tion­naire pre­pared by Tengizchevroil and obtained by ICIJ’s media part­ner Der Spiegel describes TenizService as 49% owned by KazMunayGas, the Kazakh nation­al oil com­pa­ny, and major­i­ty owned by a com­pa­ny called Waterford International Holdings Ltd. Waterford, in turn, was owned by off­shore com­pa­nies, includ­ing one with Visor shareholders.

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Schillings said that it appeared Karibzhanov owned shares in TenizService through Waterford.

Oil indus­try exec­u­tives tried to untan­gle the con­vo­lut­ed own­er­ship of the com­pa­nies oper­at­ing with­in the large oil fields. “It’s tough to say who owns what,” said Dan Houser, then a vice pres­i­dent of the U.S. oil ser­vices firm J. Ray McDermott, accord­ing to a 2010 State Department cable.

Behind the own­er­ship struc­tures, he said, “all roads lead to TK” — Kulibayev – a com­ment Kulibayev lawyers called “pure hyperbole.”

Atradius DSB, the cred­it insur­er of the Dutch state, which cov­ered the project for dredg­ing con­trac­tor Van Oord, asked TenizService to dis­close its ben­e­fi­cial own­ers and didn’t get an answer, accord­ing to sources and doc­u­ments obtained by ICIJ’s Dutch media part­ner NRC. TenizService, accord­ing to Atradius, is noth­ing more than a “vehi­cle.”

Internal doc­u­ments, includ­ing emails from oil com­pa­ny com­pli­ance and audit man­agers, obtained by Der Spiegel, reveal con­cerns about the project — such as TenizService’s rel­a­tive­ly small size, envi­ron­men­tal issues, ques­tion­able pay­ments, ques­tion­able vet­ting and “poten­tial indi­rect con­nec­tion” to an unnamed gov­ern­ment official.

Less than two weeks after TenizService’s pitch to build the offload­ing facil­i­ty, Jon Clements, a Tengizchevroil man­ag­er, urged quick approval for TenizService to start sur­vey work before the Caspian Sea froze. “We are going to lose abil­i­ty to have [TenizService] per­form sur­vey work before freeze up unless we release them ASAP,” he wrote.

Three days lat­er, Tengizchevroil project direc­tor Paul Benoit con­firmed that “due to urgent project needs,” TenizService could move for­ward with the deal — even though nei­ther a con­tract nor anti-cor­rup­tion review had been completed.

Compliance offi­cers warned the TenizService deal raised con­cerns that the Kazakh firm might be engaged in ques­tion­able pay­ments to win the per­mits. Exxon orig­i­nal­ly opposed the project over such con­cerns, for­mer Chevron lawyer Mark Egan said in a leaked memo.

Chevron man­ag­er Joseph “Al” Ducote wrote just nine days before the deal went through: “The com­pli­ance and due dili­gence issues around this TenizService con­tract for Prorva port work is very bright on a lot of radars.”

Asked if Kulibayev’s gov­ern­ment con­nec­tions helped fast-track the project, Kulibayev’s lawyers said he was not involved in Tengizchevroil’s man­age­ment or board. Nor was he involved in the award­ing of the TenizService con­tract, they said.

The Tengizchevroil part­ners soon real­ized that TenizService couldn’t finance the project with­out sig­nif­i­cant help, accord­ing to an email exchange between con­tract offi­cers, obtained as part of Caspian Cabals. So TenizService turned to Halyk — the bank major­i­ty owned by Kulibayev — for a $100 mil­lion line of credit.

Kulibayev’s lawyers said that as of December 2018, TenizService had an out­stand­ing loan from Halyk Bank, but they were unaware of any line of credit.

By 2014, Tengizchevroil had revised the con­tract and tak­en on much of TenizService’s work. It assigned its own peo­ple to many of the jobs and lim­it­ed the Kazakh firm’s role most­ly to licens­ing, autho­riza­tions and per­mit­ting — and paid TenizService near­ly $800 mil­lion extra.

Three years into the project, Tengizchevroil inter­nal audit super­vi­sor Katerina Vardashko raised ques­tions about cer­tain invoic­es and fees, includ­ing some that were described in Russian as com­mis­sion fees for obtain­ing per­mits from local author­i­ties. “We need to get any doc­u­men­ta­tion that explains” the fees, she wrote, adding that the Russian descrip­tion seemed to make them “even more questionable.”

In August 2016, an inter­nal Tengizchevroil email obtained by Der Spiegel with the sender’s iden­ti­ty redact­ed arrived in the inbox of project man­agers: “Please, be informed that a lot of unclear things are hap­pen­ing regard­ing the Marine Channel project,” it said. ”Amounts are very high­ly raised mul­ti­ple times. Prices are very high … they set just ‘crazy’ amounts of mon­ey. Please, take it under advisement.”

And the ben­e­fits kept com­ing. At the end of the project, Tengizchevroil hand­ed over the entire $2.5 bil­lion ship­ping facil­i­ty to TenizService.

Haymish Paulse, a spokesman for Tengizchevroil, said the con­sor­tium is review­ing ICIJ’s find­ings but declined to answer ques­tions about the con­tracts or whether Kulibayev played any role.

“[Tengizchevroil] is a law-abid­ing com­pa­ny and imple­ments strin­gent poli­cies and pro­ce­dures regard­ing com­pli­ance and busi­ness ethics,” Paulse said.

TenizService did not respond to ques­tions about its ben­e­fi­cial own­ers, con­nec­tions to Kulibayev or Halyk Bank, project per­mits or mas­sive project cost increas­es. Exxon, KMG and Lukoil also did not respond, nor did a spokesman for the Kazakh Energy Ministry.

In a writ­ten state­ment, Chevron senior media advis­er Sally Jones said the com­pa­ny has robust com­pli­ance pro­ce­dures. “Chevron is com­mit­ted to eth­i­cal busi­ness prac­tices, oper­at­ing respon­si­bly, con­duct­ing its busi­ness with integri­ty and in accor­dance with the laws and reg­u­la­tions” where it oper­ates, she said.

Egan, the for­mer Chevron lawyer assigned to Tengizchevroil and the TenizService con­tract, told ICIJ in a writ­ten state­ment: “I can state cat­e­gor­i­cal­ly that I am aware of no ille­gal or uneth­i­cal con­duct or wrong­do­ing what­so­ev­er by Chevron or TCO in con­nec­tion with TCO’s con­tract with TenizService.”

Cashing in

After near­ly 30 years as pres­i­dent of Kazakhstan, Nazarbayev abrupt­ly resigned in March 2019. His hand­picked suc­ces­sor, Kassym-Jomart Tokayev, vowed to clamp down on the theft of state assets, face down oli­garchs and redis­trib­ute the nation’s wealth more evenly.

Local media report­ed that the new gov­ern­ment moved to lift the lid on Kulibayev’s assets and demand­ed a com­pa­ny con­trolled by Kulibayev return fuel depots that courts ruled his com­pa­ny had ille­gal­ly pri­va­tized in 2001, along with sev­er­al land plots in sought-after parts of Almaty. In a sep­a­rate case, pros­e­cu­tors demand­ed that a com­pa­ny belong­ing to his 87-year-old father, the one­time Communist Party boss who had served as min­is­ter of con­struc­tion, hous­ing and devel­op­ment, return a $66 mil­lion oil ter­mi­nal on about 330 acres.

Lawyers for the elder Kulibayev said he was not per­son­al­ly impli­cat­ed. His son wasn’t accused of any wrong­do­ing and has not had to return any­thing, Schillings said.

The gov­ern­ment of Kazakhstan filed arbi­tra­tion claims for more than $150 bil­lion against four oil com­pa­nies — Eni S.p.A., Shell PLC, Exxon and TotalEnergies SE — for alleged­ly fail­ing to deliv­er on bil­lions of dol­lars in promised rev­enue at the Kashagan field. According to media reports, the coun­try alleged cor­rup­tion taint­ed some contracts.

Karachaganak

Ukraine

Russia

Kazakhstan

Kashagan

CPC pipeline

Tengiz

Port of

Novorossiysk

Romania

CPC ter­mi­nal

Black Sea

Uzbekistan

Bulgaria

Caspian Sea

Georgia

Azerbaijan

Armenia

Turkmenistan

Turkey

Mediterranean Sea

Syria

Iraq

Iran

Exxon did not com­ment on the arbi­tra­tion claims, nor did Shell. TotalEnergies referred ques­tions about the arbi­tra­tion claims to Kashagan’s oper­at­ing com­pa­ny, which did not com­ment oth­er than to say it oper­ates respon­si­bly and com­plies with the law. Eni said it is review­ing the arbi­tra­tion claims but they “appear nei­ther cred­i­ble nor substantiated.”

None of these reper­cus­sions has affect­ed Kulibayev’s immense wealth. His net worth — not includ­ing his wife’s for­tune — has reached $5 bil­lion, accord­ing to Forbes’ lat­est annu­al bil­lion­aires ranking.

He owns prop­er­ties in the Czech Republic and in the German spa town of Baden-Baden; a med­ical clin­ic for “regen­er­a­tive med­i­cine” in Barcelona with mul­ti­ple park­ing spaces; and a sprawl­ing estate along Spain’s Mediterranean coast, an ICIJ review of cor­po­rate and land records found. Kulibayev’s 100-foot yacht, Sonny II, which he bought in 2014 for about $14 mil­lion, is moored in Barcelona.

Emails, invoic­es and oth­er doc­u­ments ana­lyzed by ICIJ show that Kulibayev’s com­pa­nies’ assets over the years have also includ­ed a $74.4 mil­lion Airbus A320 and a $55 mil­lion Gulfstream G650. Representatives for Kulibayev con­firmed to ICIJ that his com­pa­ny “owns one pri­vate jet and has anoth­er on order”and that “once that jet is ready, he may sell the cur­rent one”.

In March 2020, APH Property Trust Ltd., where Kulibayev is list­ed as a “set­t­lor” (the par­ty who trans­fers assets into the trust), held res­i­den­tial prop­er­ty in the United Kingdom, accord­ing to doc­u­ments that came from a trove of 100,000 leaked files from Genesis Trust, a Cayman Islands-based finan­cial ser­vices provider.

The doc­u­ments show that Kulibayev’s lav­ish­ly fund­ed trust list­ed Gaukhar Ashkenazi, Kulibayev’s for­mer part­ner, as its pro­tec­tor, or a kind of overseer.

A sec­ond trust, called Continuum Trust Ltd 2, held secu­ri­ties, pri­vate equi­ty invest­ments and art­work val­ued at more than $99 mil­lion in 2020, includ­ing a clay copy of Auguste Rodin’s “The Kiss.”

ICIJ couldn’t ver­i­fy if the trusts are still active, as infor­ma­tion about Cayman Islands-based trusts is not made public.

Farrer & Co, a London-based law firm rep­re­sent­ing Ashkenazi, said she is an inde­pen­dent­ly suc­cess­ful busi­ness­woman. The law firm assert­ed that the assets held by the APH trust were val­ued at about $49.6 mil­lion in March 2020.  The lawyers acknowl­edged that the APH Trust list­ed a pair of prop­er­ties in London’s Kensington area, pur­chased in 2007.

By con­trast with that immense wealth, many Kazakh cit­i­zens have con­tin­ued to strug­gle with eco­nom­ic hard­ship. In January 2022, a sharp spike in fuel prices in Kazakhstan sparked protests and riots as cit­i­zens rebelled against cor­rup­tion, pover­ty and inequal­i­ty. At least 238 peo­ple died in the violence.

That same month, Kulibayev’s char­i­ta­ble foun­da­tion donat­ed $4.2 mil­lion to health, edu­ca­tion and oth­er pro­grams, accord­ing to his lawyers. That was part of $103 mil­lion they said his Halyk Charitable Foundation con­tributed to human­i­tar­i­an caus­es since 2016, includ­ing $65 mil­lion to flood vic­tims in Kazakhstan’s Atyrau region, where the Tengiz field is located.

His father-in-law, Nazarbayev, has dis­ap­peared from pol­i­tics. But his name can be found across Kazakhstan: the air­port, a uni­ver­si­ty and a street in Almaty are named after him.

Meanwhile, Chevron has raised the cost of its mas­sive Tengiz infra­struc­ture project to $48.5 bil­lion — up from $36.8 bil­lion in 2016, an increase of 32% — fuel­ing con­cern among investors.

The com­pa­ny says the part­ner­ship has “become a cat­a­lyst for boost­ing economies, cre­at­ing jobs, sup­port­ing busi­ness­es, build­ing com­mu­ni­ties, empow­er­ing peo­ple and advanc­ing crit­i­cal sus­tain­able devel­op­ment goals.”

In the last 30 years, Chevron, Exxon and the oth­er Tengizchevroil part­ners have paid more than $190 bil­lion to Kazakh enti­ties — for employ­ees’ salaries, goods and ser­vices, and tar­iffs and fees paid to state-owned com­pa­nies — accord­ing to a fact sheet pub­lished by the con­sor­tium last year. This also includ­ed more than $100 bil­lion to the gov­ern­ment over the past decade. That’s an aver­age of $10.8 bil­lion a year, mak­ing Tengizchevroil one of Kazakhstan’s largest taxpayers.

Reformist law­mak­ers say Kazakhstan suf­fers from the “oil curse” — which pro­duces a moun­tain of cash but no democ­ra­cy and lit­tle to lift the poor — since it signed the first con­tracts with Western oil com­pa­nies. They have demand­ed audits, inves­ti­ga­tions and dis­clo­sure of all the con­tracts but the oil com­pa­nies and the gov­ern­ment of Kazakhstan have refused to make the con­tracts public.

“Nazarbayev’s cir­cle, his rel­a­tives, sons-in-law, daugh­ters became rich thanks to the fact that they have such a patron-father. There are a lot of such capa­ble kids who could become bil­lion­aires if they had a father like Nazarbayev,” Yermurat Bapi, a mem­ber of Kazakhstan’s par­lia­ment and for­mer news­pa­per own­er, said in an inter­view with an ICIJ reporter in an Astana cof­fee­house. “In our coun­try, only Nazarbayev’s cir­cle is engaged in oil and gas — oth­ers are not allowed,” added Bapi, who has a his­to­ry of crit­i­ciz­ing the gov­ern­ment on corruption.

Meanwhile, Dutch media report­ed that pros­e­cu­tors in the Netherlands  are look­ing into whether Dutch dredg­ing com­pa­ny Van Oord had an improp­er finan­cial rela­tion­ship via an inter­me­di­ary with the father of a son-in-law of Nazarbayev. They did not name the son-in-law.

Schillings said the elder Kulibayev has not been noti­fied or ques­tioned about that inves­ti­ga­tion. “As far as he is aware, he is uncon­nect­ed to it,’ Schillings said.

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A coali­tion of advo­ca­cy groups has tried unsuc­cess­ful­ly to get the Biden admin­is­tra­tion to sanc­tion Kulibayev and oth­ers in the Central Asian country.

They say human rights abus­es go hand in hand with cor­rup­tion in a coun­try where “the rul­ing elite uses its pow­er to appro­pri­ate the wealth of their nation by embez­zling gov­ern­ment funds and con­trol­ling mon­ey-mak­ing enter­pris­es,” a con­fi­den­tial report sub­mit­ted in 2021 to the U.S. State and Treasury depart­ments says, call­ing for Kulibayev to be sanc­tioned for alleged cor­rup­tion. “The line between pub­lic and pri­vate in Kazakhstan is thus vir­tu­al­ly non-existent,’’says this report, sub­mit­ted by Freedom for Eurasia and Kazakh NGO Liberty. “A small group of fam­i­lies dom­i­nate the busi­ness sphere, fam­i­lies who are at the same time involved in the country’s polit­i­cal system.”

During a sanc­tions debate in the U.K. House of Commons on the eve of the Russian inva­sion of Ukraine in February 2022, U.K. law­mak­er Margaret Hodge called for inves­ti­ga­tions into Kulibayev and oth­er Kazakh oli­garchs with an eye toward impos­ing sanc­tions. “Evidence sug­gests that Kulibayev abused his posi­tion to accrue vast wealth,” she said. Kulibayev left the Gazprom board in ear­ly 2022. His rep­re­sen­ta­tives say he resigned vol­un­tar­i­ly short­ly after Russia’s inva­sion of Ukraine.

The State Department did not com­ment on the advo­ca­cy groups’ report and the Treasury Department did not respond to mul­ti­ple requests for com­ment. An offi­cer at the U.K.’s National Crime Agency told ICIJ in May they did not inves­ti­gate. The NCA spokesman declined to com­ment in November.

[The U.S.] has pres­sured Kazakhstan not to take any actions against the oil com­pa­nies’ mas­sive fail­ures … It’s a com­fort­able arrange­ment for the oil com­pa­nies, but it has cost the cit­i­zens of Kazakhstan dear­ly.— busi­ness­man James H. Giffen

In Washington, anoth­er call for a review of cor­rup­tion in Kazakhstan came from U.S. Rep. Bennie Thompson of Mississippi, rank­ing Democrat on the House Homeland Security Committee. Thompson cit­ed Kulibayev in House floor remarks about why the U.S. needs to upgrade its anti-cor­rup­tion efforts to tar­get klep­to­crats. “Fighting cor­rup­tion is an imper­a­tive for the United States,” Thompson said in 2021, urg­ing his col­leagues to pass a bill to beef up enforce­ment against klep­toc­ra­cies and graft. “As a bea­con of lib­er­ty and the rule of law, it is our duty.”

The bill, which would have cre­at­ed a fund from com­pa­nies found liable under the Foreign Corrupt Practices Act, went nowhere.

In an inter­view with Columbia University’s Harriman Institute three years before his death in 2022, Giffen, the mid­dle­man who had helped nego­ti­ate some of the orig­i­nal deals with Western oil com­pa­nies, said that Kazakhgate had as much to do with U.S. pol­i­tics as with corruption.

“The U.S. gov­ern­ment, under both Republican and Democratic admin­is­tra­tions, has pres­sured Kazakhstan not to take any actions against the oil com­pa­nies’ mas­sive fail­ures on Kazakhstan’s oil projects,” Giffen said. “It’s a com­fort­able arrange­ment for the oil com­pa­nies, but it has cost the cit­i­zens of Kazakhstan dearly.”

Contributors: Will Dahlgreen, James Oliver (BBC); Marcel Rosenbach (Der Spiegel); Carina Huppertz, Hannes Munzinger (Der Spiegel/Standard/Paper Trail Media); Pelin Unker (DW Turkey); Ritu Sarin, Sukalp Sharma (Indian Express); Paolo Biondani, Leo Sisti (L’Espresso); Carola Houtekamer, Karlijn Kuijpers (NRC); Anuška Delić (Oštro); Roman Badanin, Mikhail Rubin (Proekt); Stefan Melichar (Profil); Manas Qaiyrtaiuly, Reid Standish (RFE/RL); Luc Caregari (Reporter.lu); Sylvain Besson (Tamedia); Vyacheslav Abramov (Vlast.kz/OCCRP); Olga Loginova, Paolo Sorbello (Vlast.kz); Naubet Bisenov, Nicole Sadek, Thomas Rowley, Peter Stone (ICIJ)

Correction Nov. 25, 2024: An ear­li­er ver­sion of this sto­ry erro­neous­ly stat­ed that Timur Kulibayev was list­ed in a 2012 Steppe Capital annu­al report as the “sole share­hold­er” of KazStroyService. Kulibayev was list­ed in the doc­u­ment as the “sole share­hold­er” of Steppe Capital. Kulibayev acquired a 50% stake in KazStroyService in 2007, accord­ing to his lawyers.

Update Dec. 9, 2024: After fur­ther cor­re­spon­dence from Timur Kulibayev’s rep­re­sen­ta­tives, this sto­ry was updat­ed. The update includes that Kulibayev left the Gazprom board in ear­ly 2022. His rep­re­sen­ta­tives say he resigned short­ly after Russia’s inva­sion of Ukraine. The update also includes Kulibayev’s denials of receiv­ing pay­ments from Agostino Bianchi or ever engag­ing in bribery.

Source: ICIJ

By Sydney P. Freedberg, Agustin Armendariz, Tanya Kozyreva, Matei Rosca and Marcos Garcia Rey

Image: Ben King / ICIJ

November 22, 2024