Voice Assistant

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

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

24 August 23


Analysis of the food service industry

Our research is devoted to the analysis of the global food service industry and the two largest cities of Kazakhstan - Almaty and Astana. The work includes a variety of businesses, such as restaurants and cafes, bars, fast food restaurants, as well as food delivery. 

The global food service industry will continue its development, relying on the food delivery expansion, the development of technologies in the food industry, the digitalization of processes and the active introduction of innovative approaches.

Kazakhstan's food service industry is also at the stage of rapid growth, and the most popular segment is full-service restaurants. The analysis of the domestic market was carried out on the basis of our up-to-date data containing information on the amount, number and frequency of customer transactions. 

And we determined that high competition causes low business survival - almost a third of restaurants in two major cities of Kazakhstan cannot stay on the market even for a year. 

The average bill of catering places varies throughout the year due to many factors, such as seasonality, holidays, economic situation, etc. The average bill and visit frequency at public catering places also depend on the age of visitors. People over 35 visit are willing to spend more money although visit restaurants less often, whereas young people under 35 visit restaurants more often, but their average bill is much lower.

The results of the study can be useful for developing an industry development strategy and making decisions for a new or existing business.

One-off Researches

BusinessNargiza Makenova

09 August 23


Monetary conditions (May 2023)

According to RMCI dynamics, there is a further monetary ridigity strengthening in May 2023. The Index components have an undirectional effect on prices, while the main contribution to the monetary conditions tightening is made by the exchange rate component. And both RMCI Index components began to deviate more strongly from their equilibrium value following May 2023 results.

Despite the increasing transition of the real interest rate to the zone of positive values, provided by the weakening of price pressure while maintaining the NBK base rate at 16.75%, it has a weak deterrent effect on household consumption behaviour. 

Firstly, the household decisions to save or spend come from their inflation expectations, which by the end of May 2023 were higher than the actual dynamics of price growth (17 vs. 15.9) and reflect the intuitive expectations of economic agents of further inflation growth due to the influence of price conjuncture in the housing and fuel markets. Secondly, the availability of consumer credit, as well as active fiscal leverage increases incentives to keep consumer demand excessive, which continues to create an imbalance in market forces.

The continued expansion of the positive gap in the real effective exchange rate of tenge that was provided by a high base rate leads to an increase in the restraining effect of monetary conditions on the import component of prices. Thus, the main influence of monetary conditions is mostly expressed in the control of the external component of consumer inflation. While measures aimed at limiting domestic price pressure do not work due to the inconsistency of macroeconomic policy measures and the weakness of the percentage channel of the monetary policy transmission mechanism.  

Periodic Researches

ConsumptionInflationBase RateAizhan Alibekova

07 August 23


Leading indicator of economy (6 months of 2023)

According to the data for the first half of the year, the economy grew by 5%, while the short-term economy indicator - by 5.6%. The widening of the difference between the short-term economic indicator and GDP data occurred as a result of the economic downturn in professional activity fields, real estate transactions and public administration and defence. Cyclical industries continue to be the main economic drivers, growing by double-digit values due to the increased government spending, growing consumer activity and the implementation of infrastructure modernization plans. We expect these industries to continue to maintain high growth rates. 

The industrial sector also has an additional positive impact on the economy. Thus, the mining industry grew by 15.4% compared to June last year as a result of the base effect. Considering that last year the problems at CPC and Kashagan continued until November, we should expect the development of this industry at high levels by the end of the year.

Thus, the previously observed trends persist and the economy continues to be in the overheating zone. 

Given the above, we expect the economy to maintain high growth rates in the range of 4.7-5.0% next month, followed by a slight decline to 4.5-4.8% at the end of the year. This will also be affected by improving business conditions, good demand for goods and services from the population, a boom in the construction industry and a stable situation in foreign markets.

However, there are still risks from the deterioration of the geopolitical situation, falling oil prices due to insufficient demand and accelerated price growth within the country.

We expect annual economic growth at the level of 3.9-4.2% from 2024. One of the main engines of such growth will be the hydrocarbon sector due to the expansion of oil fields and an increase in oil production, alternative routes in supply chains, as well as the introduction of new production facilities as part of the national development plan implementations.

BusinessKlara Seidakhmetova

Sign Up for the Most Helpful Mailing List