BAKU, Azerbaijan, November 5. Sustained investment in Kazakhstan's energy infrastructure hinges on extending existing contracts for the nation's premier fields, Tengiz, Kashagan, and Karachaganak, a joint study by the Kazenergy Association and S&P Global reveals.
"Extending contracts for the Tengiz, Kashagan and Karachaganak projects is necessary to attract additional investment, sustain production and facilitate the introduction of advanced technologies, while ensuring a balance between short-term production and government revenue targets, on the one hand, and best practices in the long-term management of field development, on the other," the report says.
The report notes that smaller producers, particularly in western Kazakhstan, could increase output through enhanced oil recovery methods and other technologies, provided tax reforms make investment in further development of mature fields commercially viable.
"In addition, Kazakhstan needs to address non-geological constraints that are slowing the development of subsoil blocks awarded through recent auctions. These constraints include access to infrastructure, permitting, export logistics and the harmonization of regulatory requirements applicable to conventional and potentially unconventional resources," the report says.
The report emphasizes that the success of efforts to attract new investment in Kazakhstan's hydrocarbon production sector will serve as a major test of the country's overall investment climate.
The treatment of investors in this strategically important sector, particularly the stability of fiscal, regulatory and contractual conditions, shapes perceptions of risk across the wider economy.
"Although global market conditions also influence investment decisions, the predictability and consistency of domestic policies often play an equally important role. Accordingly, creating a more favorable investment environment in exploration and production would help Kazakhstan attract international capital, reduce concerns about country-specific risks and stimulate investment across its entire fuel and energy complex," the report says.
