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Kazakhstan's oil and gas industry review

Jusan Analytics team analyzed Kazakhstan's oil and gas industry

Main conclusions

  • In terms of proved oil reserves, Kazakhstan’s ranks 12th place in the world – 3.9 billion tons, and in natural gas reserves it ranks 14th – 2.7 trillion cub. m.;
  • In 2021, oil production amounted to 85.9 million tons (the share of domestic consumption – 23%), and gas production – 54.2 billion cub. m. (61%). Oil production is expected to amount to about 87 million tons in 2022, and after 2024 it may reach 100 million tons;
  • Kazakhstan has increased oil production by 3.5 times over the past 30 years, and in oil production in 2021 it ranks 13th in the world (2% of global production);
  • The largest oil development and production projects are Tengizchevroil LLP (31%), North Caspian Operating Company N.V. (19%) and Karachaganak Petroleum Operating N.V. (13%);
  • The total length of the gas transportation system of the Republic of Kazakhstan is more than 56 thousand km of gas distribution networks, more than 20 thousand km of main gas pipelines and 56 compressor stations;
  • More than 80% of the oil produced in Kazakhstan is exported, and the rest is supplied to the domestic market for processing;
  • In the structure of Kazakhstan’s total exports for 2021, oil accounts for 51.5% of all goods, and gas – for 3.8%. For 2020 – 50.5% and 5.3%, respectively;
  • By the end of 2021 production of gasoline of all brands amounted to 4.81 million tons (+ 7.4% compared to 2020): exports – 0.1, domestic consumption – 4.71, aviation fuel – 0.59 (+33.1%). Diesel fuel production – 4.99 million tons (+6.8%): import – 0.3, export – 0.2, and its domestic consumption – 5.1;
  • The republican budget of Kazakhstan is replenished by 30-50% at the expense of the oil and gas industry;
  • Over the past 10 years, the average share of oil and gas in the gross inward investment to Kazakhstan was about 33%;
  • Kazakhstan’s energy exports is still dependent on transit countries;
  • The recovery of global demand for energy resources, high oil and gas prices allow increasing the volume of revenues from the oil and gas sector. 

Threats and risks

There is uncertainty in the global energy markets today. In addition, anti-Russian sanctions and currency fluctuations also negatively affect the country’s export potential.

The major risks of Kazakhstan’s oil and gas industry are:

  • Dependence of Kazakhstan’s energy exports on transit countries;
  • Lack of investment resources due to the high capital intensity of projects and the shift to green energy;
  • The low-cost build-up by OPEC+ countries despite the dynamics of demand, as well as the active involvement of Iran as an oil seller without sanction restrictions;
  • The increase in the cost of oil production at old deposits and the tightening of oil company regulations;
  • Insufficient infrastructure development. For example, the low throughput capacity of pipelines and the Kazakhstan sector of the Caspian Sea;
  • The trend of carbon neutrality transition in the oil and gas industry;
  • The introduction of the EU carbon tax, which can significantly reduce oil export revenues;
  • A large share of revenues from oil and gas production and exports go to foreign companies;
  • A possible global recession may lead to a decrease in demand for energy resources and a reduction in industrial production;
  • Uncompetitiveness of the oil refining sector and poor development of the petrochemical sector.

Prospects and trends

There has been a tendency for energy demand to outstrip supply since 2021.

Due to the containment of crude oil production by OPEC+ members and the recovery of economic activity after the COVID-19 pandemic, the price of Brent crude oil in 2022 surged to record values. According to the US Energy Information Administration forecasts, the average oil price will be $105 per barrel in 2022 and $95 in 2023.

We can note following prospects for the industry:

  • Recovery of global energy demand and high oil and gas prices. And according to forecasts of international experts, implementation of a new supercycle of persistently high oil prices;
  • Limited global hydrocarbon reserves at depletion and increased complexity of production at old deposits;
  • Slowing down the expansion of the renewable energy sources share;
  • High demand for energy resources from China, India and the EU (energy crisis);
  • The geopolitical difficulties of using and obtaining gas for European countries strengthen the demand for a substitute in the form of oil and its refined products;
  • Changing the structure of global demand for crude oil from mainly the fuel and energy industry to the needs of construction, agriculture and the production utility goods;
  • Cost reduction and improvement of technologies for the production of various polymers will ensure constant demand, which will significantly reduce the volatility of oil prices;
  • Increased demand for petrochemical products. According to our Scoring, the petrochemical industry has one of the best development potentials in Kazakhstan.

Ayat Suraganov

Senior Analyst

09 October 23


How not to be unemployed: what you need to know about the future labour market

Experts of the World Economic Forum (WEF) presented new forecasts for business, professions and skills development in the next 5 years. The study is based on surveys of the largest employers and their expectations regarding business development, professions and skills. The survey involved 803 companies employing more than 11.3 million people, covering 27 industry clusters and 45 economies worldwide.

Key insights:

  • Employers expect structural changes in 23% of jobs;
  • The "green" economy is the main source of new jobs;
  • Economic challenges are the greatest threat to the labour market;
  • Advanced technologies will remain a key driver in business transformation;
  • About 75% of the surveyed companies plan to implement AI by 2027;
  • Up to 43% of all business tasks will be performed by machines in the coming 5 years;
  • The most popular profession is artificial intelligence and machine learning specialists;
  • Analytical thinking is a key skill for a successful career;
  • 47% of the surveyed employers evaluate their skills when selecting candidates, and 45% require a diploma;
  • In the next five years, 44% of the basic skills of employees will become obsolete and 6 out of 10 employees will have to undergo training.

One-off Researches

Businesslabour marketAlexandra Molchanovskaya

06 September 23


Financial analytics: How much do we spend on routine expenditures?

We face a variety of expenses that vary depending on our needs, circumstances and preferences in our daily lives. Some people need quality food, others need to repay loans regularly and for some entertainment and recreation become a priority. However, the question often arises: Do we have enough income to meet all these needs? What amount of money is needed to achieve a comfortable standard of living? Is it possible to classify yourself as middle class by your expenses? 

In this regard, we decided to analyze the core expenditures that each person or family needs to achieve a minimum level of comfort and meet basic life needs. As a result of the study, we divided the employees of Astana and Almaty cities into 6 groups depending on their income and expenses and also determined the size of each class: the least well-off, low-income, lower middle class, middle class, prosperous and well-off. 

Key insights:

  • An average of 246.3 thousand tenge or 60% of salary is spent on core expenditures every month.
  • The largest amount of daily expenses is observed in the first 4 days after receiving a wage.
  • At least 450 thousand tenge per month is required to satisfy all basic needs for a comfortable life in megapolicies.
  • Almost half of the employed in Astana and Almaty cities (49%) do not have enough earnings to cover their daily expenses.
  • The is an essential disparity between workers and cities - there are 4 times more workers with financial difficulties in Almaty than in the capital.
  • Only 4.4% of employees with wages from 700 thousand to 1.2 million tenge, whose daily expenses account for 40-50% of income, can be attributed to the middle class.
  • Employees with above-average incomes make up the smallest share of the employed population - 2%. 

One-off Researches

Standard of livingConsumptionAlexandra Molchanovskaya

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