This is a best prospect industry sector for this country. Includes a market overview and trade data.

This is a best prospect industry sector for this country. Includes a market overview and trade data


According to the Oil & Gas Journal, Kazakhstan has proven crude oil reserves of 30 billion barrels as of January 2018–the 2nd–largest endowment in Eurasia after Russia, and the 12–largest in the world, just behind the United States.  Kazakhstan has the largest proven oil reserves in the Caspian Sea region. Kazakhstan's crude and condensate output increased by 4.8% in 2018 and reached 1.814 million bpd.  In 2017, Kazakhstan produced 1.73 million bpd of crude oil.  According to Business Monitor International, Kazakhstan's net exports of crude oil is forecast to fluctuate around 1.42 – 1.55mbpd through 2027 as production increases from the prolific Kashagan and Tengiz fields.  Kazakhstan is rapidly expanding production at its three large refineries; it has completed upgrades of the Pavlodar plant, with work at Atyrau and Shymkent expected to be completed by late 2018.  The total refining capacity of the three plants is expected to increase from 13.8 to 16.5 million tons.  They all are operated by JSC KazMunayGas – Processing and Marketing.  The government has announced plans to construct a fourth refinery to further expand refining capacity and production of light oil products and fuels. 

Kazakhstan has the Caspian Sea's largest recoverable crude oil reserves. While current proven oil reserves total 30 billion barrels, possible onshore and offshore hydrocarbon reserves dwarf proven reserves, with an estimated 60-100 billion barrels left to uncover, mostly in the Kazakh part of the Caspian Sea.  Some experts estimate that the offshore Kashagan field alone may contain 35 billion to 50 billion barrels of oil.  Kazakhstan’s vast natural resources are projected to meet 2-3% of predicted global oil demand in the next decade.

The Government of Kazakhstan and foreign investors continue to focus heavily on the hydrocarbons sector, which, since 1991, has received approximately 60% of the foreign direct investment in the country, and constitutes approximately 53% of its export revenue.  Existing oil extraction sites offshore in the North Caspian, combined with onshore fields currently under development, signify Kazakhstan as a potential major near-term oil exporter.

Kazakhstan also has significant natural gas potential.  Its proven gas reserves stand at 3 trillion cubic meters and projected reserves at 5 trillion cubic meters. The country also expects significant production of oil-associated gas that will bring 1,000 cubic meters of gas for every new ton of oil (100 million tons of new oil will lead to 100 billion cubic meters of gas).  Natural gas production is utilized for well re-injection, exports and to meet domestic consumption (liquefaction and development of internal gas pipeline infrastructure).  The country's gas output - which is mostly associated gas - is forecast to continue an upward trend, reaching 29.6bcm in 2027.

The national oil and gas company, KazMunaiGas (KMG), is largely responsible for coordinating licensing and tenders for oil and gas blocks.  It also plays a role in almost all contracts with foreign oil and gas companies.  KMG also manages Kazakhstan’s share of the Caspian Pipeline Consortium (CPC). KMG holds stakes in 47 enterprises conducting petroleum operations (including TengizChevrOil, North Caspian Operating Company), pipeline and sea transportation of hydrocarbons and water as well as services.

Kashagan is Kazakhstan’s first offshore oil and gas field in the Caspian Sea and is the largest international investment project in the country. Kashagan is being developed by North Caspian Operating Company (NCOC).  Oil production at the Kashagan field started in October 2016 and reached 340,000 bpd in March 2019. Oil and gas from the Kashagan field is processed at the onshore Bolashak plant. NCOC shareholders are KMG Kashagan B.V. (16.9 percent), Shell Kazakhstan Development B.V. (16.8 percent), Total E&P Kazakhstan (16.8 percent), Agip Caspian Sea B.V. (16.8 percent), ExxonMobil Kazakhstan Inc. (16.8 percent), CNPC Kazakhstan B.V. (8.3 percent) and Inpex North Caspian Sea Ltd. (7.6 percent).  NCOC has indicated that in addition to Kashagan, there are other opportunities for further growth within the license block of the North Caspian Sea Production Sharing Agreement.  This includes development of fields such as Aktoty, Kairan and Kalamkas-Sea.  Preparatory engineering work is ongoing and NCOC plans to provide a proposed development plan in the second half of 2019.

Tengizchevroil (TCO) develops the Tengiz and Korolyov oil and gas fields in the Atyrau Region (west Kazakhstan).

Tengizchevroil was formed between the Republic of Kazakhstan and Chevron Corporation in April 1993. Current partners are:

Chevron, 50 percent; KazMunaiGas, 20 percent; ExxonMobil, 25 percent and LukArco, 5 percent.  Major projects include Tengiz, Karachaganak, CNPC-Aktobemunaigas, Uzenmunaigas, Mangistaumunaigas, and Kumkol, all of which account for 1 million bpd.

TCO’s Future Growth Project and the Wellhead Pressure Management Project (FGP-WPMP) is an expansion project worth USD37 billion and presents opportunities for U.S. equipment suppliers and service providers.  Net daily production in 2018 averaged 269,000 barrels of crude oil, 387 million cubic feet of natural gas and 19,500 barrels of natural gas liquids.  FGP is designed to further increase total daily production from the Tengiz reservoir and maximize the ultimate recovery of resources. 

The FGP will use state-of-the-art sour gas injection technology, successfully developed and proven during TCO’s previous expansion in 2008, to increase daily crude oil production from Tengiz by approximately 260,000 barrels per day.  In parallel, the WPMP maximizes the value of existing TCO facilities by extending the production plateau and keeping existing plants producing at full capacity. First oil is planned for 2022.

The Government of Kazakhstan is pursuing a development program for oil fields in the Caspian Sea that calls for increasing oil production to about 3 million bpd, and for the development of terrestrial infrastructureThe offshore development program also calls for more new offshore blocks to eventually be privatized through open tenders.  This also presents an opportunity for a logistical and transformational business and pipeline projects over the next few decades.


Leading Sub-Sectors and Opportunities

Recovering oil prices have helped to stimulate Kazakhstan’s oil & gas sector, which is the main driver of the economy.  Large hydrocarbon resources and current investment in large production and transportation infrastructure projects in Kazakhstan provide significant commercial opportunities for U.S. companies.  While regulatory challenges exist, U.S. companies interested in Kazakhstan can look to the country’s national oil company KazMunayGaz (KMG) and major international consortia for opportunities in the upstream, midstream, and downstream sectors.  Opportunities exist for U.S. companies in virtually every sub-sector associated with oil extraction, processing, and transportation. 

Best prospects include drilling, research and data management, laboratory studies, oil spill cleanup technologies, and pipeline equipment and services. About 80% of the equipment used in the oil and gas sector and the mining industry is imported; most it produced in Russia and China.

To date, Kazakhstan has limited technical expertise in offshore production and operations. This experience gap offers many opportunities for U.S. service companies in rig work, support infrastructure, and environmentally sensitive technologies. The Caspian Basin's oil-bearing formations are generally quite deep (15,000 feet), under considerable pressure, and often contain a high degree of sulfur and other contaminants, making U.S. technologically advanced drilling and processing equipment necessary.

U.S. oil and gas field equipment suppliers have the potential for solid growth over the next decade as new fields are brought on-stream and secondary recovery methods are introduced to existing and aging deposits. The most promising sub-sectors are the following: offshore/onshore oil and gas drilling and production equipment; turbines, compressors and pumps for pipeline applications; valves; measurement and process control equipment for pipeline applications; industrial automation, control and monitoring systems for refineries, gas processing and petrochemical plants; seismic processing and interpretation; petroleum software development; sulfur removal and disposal technologies; well stimulation and field abandonment services; underwater repair equipment, and oil spill containment equipment.

There are also opportunities in the services areas, specifically for firms active in design engineering, project management, and construction: regional basin studies, geophysical and seismic survey, geo-modeling, well logging and formation evaluation, exploration and appraisal drilling, 3D seismic works, drilling and well completion technology, well and extraction facility installation including production facilities and pipelines, development drilling, process equipment, offshore drilling technologies and development systems, drilling operations, well completions, oil recovery processes and production enhancement, innovative drilling and harsh environment drilling technology, reservoir engineering, monitoring and testing, offshore platforms and export facilities, tanker loading, pipelines and receiving terminals, production operations, reservoir maintenance, well system maintenance, logistics support and supply chain management, refurbishment and upgrading of facilities, project management, oil spill preparedness, environmental control, oil spill technologies and response, facilities and pipeline maintenance, drilling and production waste management and treatment, employee safety training programs and occupational health, certification/licensing for scientific research and design works in Kazakhstan, adoption of international standards.


Trade Events

Kazakhstan Energy Week 2019 | 23 –27 September| Nur-Sultan, Kazakhstan
Kazakhstan International Oil & Gas Exhibition and Conference (KIOGE) 2020 | September 30-October 2 | Almaty, Kazakhstan

Web Resources

Caspian Pipeline Consortium
Ministry of Energy of the Republic of Kazakhstan           
Kazakhstan International Oil & Gas Exhibition and Conference (KIOGE) 2020  
Kazakh Institute of Oil and Gas (KING)
KazEnergy Association
KazMunaiGas (KMG)
North Caspian Operating Company
TengizChevrOil (TCO)
U.S. Energy Information Administration
For more information contact Commercial Specialist Azhar Kadrzhanova.

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