Oil and Gas - The Times Of Central Asia

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Oil and Gas

Kazakhstan Boosts Oil Output Despite Export Infrastructure Challenges

Kazakhstan increased its production of oil and gas condensate by 14% in January-November 2025 compared to the same period last year, and exceeded its annual export plan ahead of schedule, despite ongoing disruptions in the Caspian Pipeline Consortium (CPC). The figures were announced by Deputy Minister of Energy Sungat Yessimkhanov. By the end of 2024, Kazakhstan had produced 87.7 million tons of oil and gas condensate, 97.1% of its target of 90.5 million tons. Total oil exports for the year reached 63.2 million tons. In the first 11 months of 2025, production rose to 91.9 million tons, marking a 14.1% year-on-year increase. The full-year target for 2025 is 96.2 million tons. Over the same period, exports amounted to 73.4 million tons, already surpassing the annual target of 70.5 million tons and representing a 16.1% increase from the previous year. This growth came despite serious challenges to Kazakhstan’s main export route. The CPC, which carries the bulk of Kazakh crude to international markets, experienced disruptions following a drone attack on its infrastructure. The incident raised fresh concerns about the vulnerability of critical export corridors. In the gas sector, Kazakhstan produced 62.8 billion cubic meters of natural gas in January-November 2025, a 16.7% increase from the same period in 2024. The annual gas production target for 2025 has already been met. Liquefied petroleum gas (LPG) production rose to 2.8 million tons, up 1.8%. Gas transit volumes through Kazakhstan reached 64.5 billion cubic meters, up 0.9%. During the same period, domestic production of petroleum products reached 14 million tons. The full-year target is 14.5 million tons, on track to match the 2024 total, when 17.9 million tons of crude were processed domestically. Production of oil and gas chemical products increased by 12.2%, reaching 567,600 tons. The target for 2025 is set at 590,000 tons. As previously reported by The Times of Central Asia, Kazakh authorities are actively seeking foreign investment for the construction of a fourth major oil refinery with a projected capacity of up to 10 million tons per year. Overall, Astana plans to attract between $15 billion and $19 billion in investment for the development of the oil refining sector by 2040.

Organization of Turkic States (OTS)

Organization of Turkic States Discusses Key Eurasian Energy Projects

At the 5th meeting of ministers responsible for energy within the Organization of Turkic States (OTS), held on December 10 in Istanbul, OTS Secretary General Kubanychbek Omuraliev outlined major joint energy initiatives underway among member states. Founded in 2009, the OTS comprises Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, and Turkmenistan. Hungary and Northern Cyprus participate as observer states. Omuraliev touched upon the following projects: Major oil and gas routes such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Baku-Tbilisi-Erzurum (BTE) gas pipeline, South Caucasus Pipeline, Trans-Anatolian Natural Gas Pipeline (TANAP), Trans Adriatic Pipeline (TAP), and the Iğdır-Nakhchivan gas pipeline; A strategic partnership between Azerbaijan, Kazakhstan, and Uzbekistan to develop and transmit green energy; The Azerbaijan-Georgia-Turkey-Bulgaria Green Energy Corridor, which extends the Central Asia-Azerbaijan corridor and opens new avenues for energy exports to Europe; Construction of the Kambarata-1 Hydropower Plant in Kyrgyzstan, a project jointly developed with Kazakhstan and Uzbekistan; and A planned Black Sea submarine cable to transmit renewable energy. Omuraliev emphasized that enhanced intra-OTS cooperation bolsters both the economic potential of member states and regional energy security. Ministers at the meeting noted the significant fossil fuel and clean energy resources held by OTS members and observers, describing the region as a strategic energy bridge between Asia and Europe. They stressed that advancing practical cooperation is essential amid growing global energy demand and the accelerating energy transition. Participants agreed to move forward with joint projects under the OTS framework, including the establishment of a Regional Center for Technologies and Green Initiatives. As previously reported by The Times of Central Asia, on December 5, the Board of Governors of the Turkic Investment Fund announced in Bishkek that the fund will begin operations in the first quarter of 2026. The Turkic Investment Fund is the first dedicated financial institution jointly established by OTS member states. Headquartered in Istanbul, its mandate is to promote economic cooperation, boost intra-regional trade, and support sustainable development by financing major joint initiatives across the region.

Oil and Gas

China’s Power Play in Central Asia’s Energy Sector

China is steadily expanding its influence in Central Asia’s oil and gas sector through multi-billion-dollar investments, long-term supply agreements, and a growing network of strategic partnerships. From Kazakhstan to Turkmenistan, Beijing’s state-backed companies are securing key upstream and midstream assets, financing new petrochemical and pipeline projects, and positioning themselves as indispensable players in the region’s resource development. This expansion is driven not only by China’s rising energy demand, but also by Beijing’s ambition to establish durable overland energy corridors that reduce reliance on maritime routes vulnerable to disruption. Central Asia’s existing and planned pipelines provide China with rare direct access to oil and gas fields across its western frontier, making the region a focal point of its broader energy-security strategy and a cornerstone of Beijing’s efforts to diversify supply while deepening political and economic footholds across Eurasia. Kazakhstan Eyes Chinese Investment Amid Lukoil Sanctions Kazakhstan may seek to transfer Russian company Lukoil’s stake in the offshore Kalamkas-Khazar oil and gas project to a new partner, with some industry channels, including the Telegram channel Energy Monitor, speculating about possible Chinese interest. Lukoil, which has been targeted by Western sanctions, is reportedly planning to exit Kalamkas-Khazar Operating LLP, a joint venture with KazMunayGas (KMG). Each company currently holds a 50% stake. Some commentators have suggested that a Chinese investor could step in, but no replacement has been officially confirmed. Seconded engineers from KMG Engineering are expected to be withdrawn from the project as of January 1, 2026, with several Kalamkas-Khazar staff members temporarily reassigned to other KMG subsidiaries until a new partner is confirmed. The project is considered highly promising, with earlier estimates citing reserves of 81 million tons of oil and 22 billion cubic meters of gas. New exploration has identified additional oil-bearing structures. A final investment decision (FID) worth more than $6.5 billion was originally expected by the end of 2025. However, U.S. sanctions against Lukoil have delayed progress. Located 120 km from the Kashagan field in the North Caspian Basin, the Kalamkas-Khazar block comprises the Kalamkas-More and Khazar fields. The site is situated in Kazakhstan’s Mangistau Region, 60 km from the Buzachi Peninsula. KazMunayGas Chairman Askhat Khasenov previously confirmed that production was expected to begin in 2028-2029, with peak output reaching four million tons annually. Lukoil was sanctioned by the UK on October 15, followed by the U.S., complicating ongoing negotiations. Despite this, major projects where Lukoil holds minority stakes, such as Tengiz, Karachaganak, and the Caspian Pipeline Consortium, have not been impacted. A Lukoil withdrawal would create a rare opening for China to secure its first significant offshore position in the North Caspian, a zone historically dominated by Western majors and Russian firms. Such an entry would represent a notable shift in Kazakhstan’s offshore partnership landscape. Beijing's Billion-Dollar Energy Deals in Kazakhstan In September 2025, President Kassym-Jomart Tokayev announced a series of energy deals with China valued at $1.5 billion. During his official visit to China, more than 70 commercial agreements totaling approximately $15 billion were signed, several...

Oil and Gas

KMG Pushes Back on Reports of European Asset Sale Amid Romania Refinery Losses

KazMunaiGaz (KMG) says it has no concrete plans to sell any of its European assets, though pressure is building to at least sell off some of the Kazakh company’s shares in oil refineries in Romania. Reports on November 21 said KMG was looking to privatize up to 50% of its shares in its subsidiary KMG International’s (KMGI) European operations in Europe. The reports were based on a list of recommendations from Kazakhstan’s Agency for the Protection and Development of Competition (APDC), which proposed, as part of the 2026-2027 strategy, that KMGI should have a two-stage tender to sell up to 50% of its stakes. On November 26, KMG denied making any decisions about KMGI businesses in Europe, adding that the APDC’s list of recommendations “includes assets from different sectors, but this in itself does not automatically trigger a sale.” Rompetrol KMGI has 28 companies operating in seven countries, four of them European, but the focus of reports was on the two oil refineries KMGI owns in Romania. KMGI purchased 75% of the shares in the Romanian oil company Rompetrol in 2007, and in 2009 bought the remaining 25% of shares in the company. That sale included the Petromidia oil refinery, with a capacity of some five million tons annually, and the smaller Vega refinery, with a capacity of some 350,000 tons that Rompetrol owns. KMGI also took ownership of the oil terminal near Constanta on the Black Sea coast, some 20 kilometers from the Petromidia refinery. The terminal imports mainly Kazakh oil. KMGI invested billions of dollars in upgrades and modernization of the refineries and the terminal, and finally, in 2017, operations of subsidiary Rompetrol Rafinare (54.63% KMGI and 44.7% Romanian state through the energy Ministry) showed a profit - $80 million. By 2022, profits had slightly increased to $90.3 million, but in December that year, the Romanian authorities changed tax regulations, and in 2023, Rompetrol Rafinare registered a net loss of some $270.5 million, and in 2024, a loss of $78 million. In the first six months of 2025, the company lost $53 million and paid some $771 million in taxes to the Romanian government. Rompetrol Rafinare has complained to the Romanian government that the tax burden is preventing the company from investing in new projects and has brought a legal challenge to the solidarity tax in court. In such a situation, it seems unlikely KMG would easily find a party interested in buying up to 50% of KMGI’s Romanian operation, unless the price was very low. Opponents of the proposed arrangement point to the $7 billion in investment KMG has made over nearly 20 years into upgrading the Romanian refineries as a reason to be patient for a while longer. KMGI KMG has subsidiaries operating in Switzerland, Bulgaria, Turkey, Moldova, and Georgia, as well as in Romania and Kazakhstan. At the start of 2025, there were reports that KMG was considering the acquisition of an oil refinery in Bulgaria from Russia’s LUKoil, so it appeared the Kazakh company...

Oil and Gas

Kazakhstan vs Eni: How a Swiss Lawsuit Could Reshape the $160 Billion Kashagan Dispute

The legal landscape surrounding Kazakhstan’s energy sector has taken an unexpected turn. What began as a closed commercial arbitration dispute has now entered the public sphere in Switzerland’s courts. This marks a significant escalation in Astana’s confrontation with international oil and gas majors. According to Bloomberg, PSA LLP, a structure representing Kazakhstan’s interests in production-sharing agreements (PSAs), has significantly broadened its claims. The lawsuit now directly targets alleged schemes involving units and executives of the Italian company Eni. Kazakhstan alleges that during the early development of Kashagan infrastructure, including the Bolashak processing plant and pipeline systems, corruption and fraud may have occurred. Arbitration claims against the NCOC consortium, which includes Shell, ExxonMobil, TotalEnergies, and Eni, exceed $150 billion. Within this context, the Swiss case has become the most sensitive element. The Swiss case itself is much smaller – $15 million plus interest – and is being used to gather evidence and strengthen the larger arbitration case. While the financial stakes are high, the proceedings reflect a deeper political shift. Kazakhstan is moving away from the 1990s model of offering investors exceptional privileges. Under President Kassym-Jomart Tokayev’s “Fair Kazakhstan” policy, the state is aiming to secure more balanced and equitable cooperation with foreign partners. Distinctiveness of Swiss Proceedings The Swiss case is distinctive due to the nature of its allegations. The plaintiffs claim that during the tenure of Agip KCO (an Eni subsidiary) as project operator, contracts were awarded amid corrupt practices. Allegations include inflated prices and kickbacks to contractors. Targeting Eni is deliberate. The company led the project during its most troubled phase from 2001 to 2008. Kashagan’s budget swelled during this period, with repeated delays. Following a 2013 gas leak, production was halted for nearly three years. Kazakh officials have long linked Kashagan’s massive cost overruns and technical failures to poor procurement and mismanagement, and the current legal offensive zeroes in on alleged corrupt tenders. Cost estimates rose from a few tens of billions of dollars to around $60 billion, and by 2007, projections for total project costs had reached about $136 billion. Why Switzerland? The selection of the Swiss jurisdiction is strategic. Switzerland’s laws on corruption and financial crimes allow for the prosecution of both corporations and individual executives. Moreover, many entities connected to Kashagan’s operations are registered there. Another factor is the PSA’s stabilization clause, which forbids altering the contract’s terms. However, under international legal norms, if corruption is proven in the contract’s formation, such protections can be voided. This opens the door for Kazakhstan to challenge key financial terms of the agreement. Resource Nationalism 2.0: Legal Strategy Meets Political Logic Astana’s current posture can be described as a form of “new-generation resource nationalism.” Rather than using administrative leverage, the state is deploying legal tools to address grievances. This is driven in part by Kazakhstan’s fiscal needs, ranging from infrastructure upgrades to social spending. Amid these pressures, the vast expenditures reported by Kashagan operators have drawn public skepticism. Kazakhstan’s claims aim to re-evaluate the cost recovery model...

Corruption

Kazakhstan vs. Eni: Who Is the Key Figure in the Swiss Lawsuit?

Kazakhstan’s $166 billion legal campaign against the oil majors, Shell, ExxonMobil, TotalEnergies, and Eni has expanded to Switzerland. According to Bloomberg, PSA LLP, representing Kazakhstan’s Ministry of Energy, has launched proceedings aimed at strengthening the country’s position in ongoing international arbitration. Astana is seeking roughly $15 million plus interest from several companies and individuals accused of corruption in projects managed by subsidiaries of Italy’s Eni. The Swiss case centers on evidence already presented in courts in the U.S. and Italy, which Kazakhstan aims to use to prove allegations of bribery in arbitration hearings. Documents submitted by Kazakhstan to a U.S. court claim that contractors providing services to Eni implemented an “illegal scheme” to secure inflated contracts. One such contract was allegedly amended eleven times, with its value rising from $88 million to more than $490 million. While several contractors were convicted by an Italian court in 2017, no Eni employees were found guilty. Kazakh journalist Oleg Chervinsky, known for his coverage of the oil and gas sector, has highlighted that Kazakhstan is requesting the Swiss court to look into Maksat Idenov, a former first vice president of KazMunayGas, who led negotiations with Kashagan project partners between 2007 and 2008. Chervinsky recalls a dramatic episode in 2010, when Idenov resigned from KazMunayGas via a letter sent from abroad using DHL. He subsequently took a senior role at Eni. A U.S. court has approved his questioning for use in the Swiss proceedings, and his representative says he has already testified. “New revelations await us!” Chervinsky asserted. That confidence may be justified. A glance at Idenov’s career reveals his central role in Kazakhstan’s energy sector since 1992, when he began as chief legal counsel at the state holding MunaiGas. In 1993, he became assistant to the Minister of Oil and Gas Industry, and by 1995, he was serving as deputy head of the Energy Department for Europe and Central Asia at the International Bank for Reconstruction in Washington, D.C. He returned to Kazakhstan in 1999 as an advisor to then-President Nursultan Nazarbayev on Caspian energy and oil and gas export pipelines. In that role, he worked on the legal status of the Caspian Sea and other strategic projects. Idenov joined Shell in 2004 as regional vice president for strategic and commercial development in the Middle East, South Asia, and the Caspian region. In 2007, he became the first vice president of KazMunayGas. Three years later, in July 2010, he was appointed senior vice president for strategic planning at Eni. During his time at KazMunayGas, Idenov appeared in U.S. embassy cables later released by WikiLeaks. In one, he reportedly told the U.S. ambassador during a private dinner that the four most influential figures around President Nazarbayev were the Presidential Chief of Staff, Sarybay Kalmurzaev, Head of the Presidential Administration, Aslan Musin, State Secretary and Foreign Minister, Kanat Saudabayev, and the tandem of Prime Minister Karim Massimov and Nazarbayev’s son-in-law, billionaire Timur Kulibayev. Another cable described the rationale for Idenov’s appointment as lead negotiator on...