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Status of oil and gas industry in Kazakhstan. Challenges and Opportunities.

By Zhambyl Sarbas
As of today, Kazakhstan is considered as a country possessing the largest number of super-
giant hydrocarbon assets on exterior of the Persian Gulf. [1] It is reported that state is rather reliant
on mentioned assets and economy is mainly driven by oil and gas sector. For this reason, being
capable of sustaining upward trend in realm of energy remains an issue that requires sober and
diligent analysis of current challenges and opportunities.
Attraction of external investments on exploration and extraction of petroleum resources
has always been a so-called trump card of Kazakhstan. In 2018, by virtue of the fact that
Kazakhstan enacted new Code on Subsoil and Subsoil Use, it become possible to establish
improved common ground for potential partners and there isn’t been such a favorable climate for
infusion of foreign investments. [2] Moreover, adoption of new Code actually proved to be a boon
that can grant new breath and push the limits of hydrocarbon exploration status that is being
encompassed at the current day. As an example, Kazakhstan is planning to tender 120 promising
offshore structures. [3] Besides that, there are reportedly 9 sedimentary basins that are not even
studied carefully. [4] Who can argue that there isn’t any possibility of stumbling on with second
Of course, there is no any doubt that super-giant carbonates such as Tengiz, Kashagan, and
Karachyganak are legitimately in the limelight. Nevertheless, we can argue, pretty convincingly,
that mature oil fields such as Uzen, Zhanazhol, and others can be considered as a “pillars” of
industry. According to a report from IHS Cambridge Energy Research, approximately 66% of
globe’s daily oil production comes from brownfields and Kazakhstan is not an exclusion. [5] It is
known that petroleum technology is advancing from day to day so that proper development and
assessment of mature fields that are in decline phase can lead to the improved recovery. [6] Withal,
“revitalizing” of brownfields in Kazakhstan can be fairly deemed as a challenge of paramount
Last but not the least issue is human resources. Who is hiding behind the screen of
sophisticated numerical simulation and modelling of reservoirs, design of enhanced oil recovery
programs? It is all about people. Kazakhstan is in need of domestic engineering professionals who
can properly design, operate and manage petroleum operations. Root cause of that problem is
because of talent gap and the only way to resolve and handle this challenge is the generation of
young leaders.
To sum up, nearly all challenges are inherently opportunities. The key factor to keep the
status of oil and gas industry as good as possible in Kazakhstan is to be able to transform former
ones to the latter ones.
1. U.S Energy Information Administration. 2017. Country Analysis Brief: Kazakhstan.
2. Kazenergy. 2018. Kazakhstan’s New Tax And Subsoil Use Codes: A Brighter Future?. 2
(87). 66-68.
3. Crandall M.S. 2006. Energy, Economics, and Politics in the Caspian Region: Dreams and
Realities. p 90. ISBN 0-275-99130-X
4. Eurasian Forum Kazenergy. 2017. Investment prospects of the Precaspian petroleum
basin at the present stage.
5. Parshall, J. 2012. Mature Fields Hold Big Expansion Opportunity. J Pet Technol 64 (10):
52 – 58. SPE-1012-0052-JPT.
6. Banerjee. S. 2013. Developments and Challenges of Mature Oil Fields. The Way Ahead
9 (3): 11-13. SPE-0313-011-TWA.