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Oil

Kazakhstan to Invest Up to $19 Billion in Oil Refining Development

Kazakhstan’s Ministry of Energy has unveiled an updated Concept for the Development of the Oil Refining Sector through 2040, aiming to raise the country’s refining capacity to 39 million tons per year. Achieving this goal will require investments ranging from $15 billion to $19 billion. As previously reported by The Times of Central Asia, an earlier version of the Concept targeted a doubling of refining volumes from 18 million tons to 38 million tons by 2040. The updated version, presented during the Kazakhstan Energy Week 2025 forum in Astana by Talgat Makuov, Deputy Director of the Department of Oil Transportation and Refining, slightly increases that target. “Expected investments in sector development, according to the Concept, range from $15 billion to $19 billion, enabling an increase in refining capacity from 18 to 39 million tons per year while significantly improving processing efficiency,” Makuov stated. He added that the document, aimed at enhancing Kazakhstan’s energy security, has been approved by the government and developed in coordination with state agencies and key players in the oil and gas sector. Expansion of Refineries and Petrochemical Complexes “The Concept envisions expanding existing refineries and constructing high-tech, integrated petrochemical complexes with flexible product lines driven by market demand. These facilities will become long-term, high-value assets, increasing the capitalization of managing companies and attracting investors. They will also serve as the foundation for petrochemical clusters,” Makuov said. Kazakhstan’s oil and gas chemistry sector is currently advancing in two main directions. The first is oil-based chemistry, such as benzene and paraxylene production at the Atyrau Oil Refinery (ANPZ), with potential for synthesizing more complex organic compounds. The second is gas-based chemistry, which includes the KPI polypropylene project, and planned projects for polyethylene and butadiene production. Efficiency, Environment, and Innovation “A key performance target of the Concept is improving the ratio of oil production to refining from 5:1 to 2.5:1, aligning with OECD benchmarks, supported by the introduction of new refining and petrochemical facilities,” Makuov explained. “Environmental standards and emission reductions are a priority, consistent with Kazakhstan’s decarbonization goals and green development agenda. Additionally, efforts are underway to establish applied research capabilities, including the creation of a dedicated R&D institute for oil refining and petrochemistry.” Makuov emphasized that implementation of the Concept will support the sustainable development of the sector by balancing economic, environmental, and social objectives. It is expected to ensure domestic supply of high-quality petroleum products, increase export potential, particularly to fast-growing Asian markets, create new jobs, and improve the country’s investment appeal. Earlier this year, Kazakhstan also announced a $15 billion investment in the oil and gas chemical sector through six major projects, aiming to transition from raw material exports to higher-value industrial production.

Oil

Aliyev: SOCAR Begins Oil Project in Uzbekistan, Results Expected Soon

Azerbaijani President Ilham Aliyev has announced that the State Oil Company of Azerbaijan (SOCAR) has officially launched operations at an oil field in Uzbekistan. “SOCAR has already started work on an oil field in Uzbekistan, and the contract has been signed. We hope to hear good news within one to two years, and we all look forward to the announcement of a major oil discovery in Uzbekistan,” Aliyev said, as reported by Report. Aliyev also highlighted Azerbaijan’s longstanding energy partnership with Turkmenistan, noting that expanding cooperation to include Uzbekistan presents new strategic opportunities for regional development. Energy cooperation in Central Asia continues to deepen. In March 2025, Kazakhstan’s national oil company KazMunayGas and SOCAR agreed to increase oil transit volumes via the Aktau-Baku-Ceyhan route, reinforcing Azerbaijan’s growing role as a transit hub for Central Asian energy exports.

Oil

Kazakhstan Begins Oil Exports to Hungary

Kazakhstan has shipped its first batch of crude oil to Hungary, marking a significant step in the deepening energy partnership between KazMunayGas (KMG), the country’s national oil and gas company, and Hungary’s MOL Group. According to KMG, 85,000 tons of crude were transported by sea from the Russian port of Novorossiysk to the Croatian port of Omisalj aboard the Alatau tanker, operated by Kazmortransflot, a KMG subsidiary. From there, the oil was transported via the Adriatic pipeline, operated by JANAF, Croatia’s state oil pipeline operator, to the Százhalombatta refinery in Hungary. Upon the tanker's arrival in Croatia, representatives of KMG, MOL Group, and JANAF convened to discuss further cooperation. Following the meeting, KMG and MOL Group signed a framework agreement outlining future oil supply arrangements. The deal broadens the scope of Kazakhstan’s oil exports to the European Union. Kazakhstan already supplies crude to Germany via the Druzhba (Friendship) pipeline, which runs through Russian territory. As previously reported by The Times of Central Asia, Kazakhstan and Hungary reached a preliminary agreement earlier this year to supply Kazakh oil to Hungary through the Druzhba pipeline as well. The agreement was concluded in February during a meeting in Astana between Kazakhstan’s Minister of Energy, Almasadam Satkaliyev, and Hungarian Minister of Foreign Affairs and Trade, Péter Szijjártó. The two sides agreed to conduct trial shipments in 2025. MOL Group has been active in Kazakhstan for over two decades and has invested $200 million in the development of the Rozhkovskoye gas condensate field in western Kazakhstan.

Oil Transit

Russia Seeks to Boost Oil Transit to China via Kazakhstan

Russia has proposed increasing its oil transit to China through Kazakhstan's Atasu-Alashankou pipeline by 2.5 million tons annually, Kazakhstan’s Energy Minister Yerlan Akkenzhenov announced at a recent government briefing. The initiative was submitted by Russian pipeline operator Transneft and is currently under review by Kazakhstan-China Pipeline LLP, which oversees the Atasu-Alashankou route. The Kazakh operator is KazTransOil JSC, while the Chinese side is represented by CNODC (China National Oil and Gas Exploration and Development Corporation). “Preliminary studies have begun. We expect to soon determine whether additional oil pumping stations are required or if the increased volume can be handled using specialized additives,” Akkenzhenov said. The Atasu-Alashankou pipeline spans 965 kilometers and has a design capacity of 20 million tons per year. It facilitates the export of both Kazakh and Russian crude to China. In 2024, roughly 10 million tons of Russian oil were transported through this route, generating an estimated $150 million in transit fees for Kazakhstan, calculated at $15 per ton. If approved, the volume of Russian oil transported via this corridor could rise to 12.5 million tons annually. Akkenzhenov also noted that Kazakhstan plans to expand oil exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline. “Last year, we shipped approximately 1.4 million tons through the BTC. In 2025, we aim to increase this to 1.7 million tons. So far this year, about 800,000 tons have already been transported,” he said. The BTC pipeline, with a design capacity of 50 million tons per year, currently accommodates a Kazakh quota of 1.5 million tons. In 2022, Azerbaijan expressed willingness to raise this quota to 2.2 million tons. The prospect of increasing Kazakh oil flows through the BTC was also discussed during a bilateral meeting between President Kassym-Jomart Tokayev and Turkish President Recep Tayyip Erdoğan in Ankara.

Oil

What Will Kazakhstan Make of the Novorossiysk Constraint?

Russia’s July decree requiring FSB approval for foreign vessels entering Novorossiysk introduces a new procedural constraint into the regional export environment. Modest in scope, the measure nevertheless grants Moscow a latent mechanism for influencing Kazakhstan’s primary oil export route via the CPC pipeline, and by extension, its westward orientation. The CPC terminus, long treated as infrastructurally neutral, has been “recoded” as a site of discretionary oversight. This development coincides with the gradual erosion of the energy governance model inaugurated by foreign concessions at Tengiz, Karachaganak, and Kashagan, where Production Sharing Agreements (PSAs) created juridical islands largely external to domestic legal and fiscal regimes. It is possible that a new phase is emerging whereby infrastructural flows are re-anchored in sovereign discretion, as an accumulation of procedural instruments favors regional currencies and reduces Western intermediation. Kazakhstan’s energy model was built on upstream Western capital and downstream Russian transit. The fragility of that erstwhile equilibrium has now been revealed, even though the disrupter is not a single actor but a convergence of pressures. This dual-dependency now appears more vulnerable, unsettled by converging geopolitical and institutional pressures. The superficial continuity of physical infrastructure masks deeper shifts in logistical autonomy, fiscal sovereignty, and international alignment. Structural Exposure and Strategic Compression The fiscal layer exposes the shifts. Revenues from Western-operated concessions are routed into the National Fund, which reinvests them into foreign debt instruments, often issued by the same economies that operate Kazakhstan’s extractive infrastructure. Kazakhstan’s export of physical assets and reinvestment into external liabilities constitutes a structural contradiction. The state’s constitutional control over subsoil resources is not matched by operational authority. The CPC pipeline, though formally multinational, is routed entirely through Russian territory. The new decree does not immediately alter its function, but it inserts a potential instrument of political leverage. The bargaining terrain has consequently already shifted: what was previously a matter of contractual detail is now entangled with external discretion. For the present, the decree’s practical impact is limited, but it reveals the current system’s embedded asymmetry. Moscow’s move signals a readiness to formalize political leverage. It lays the groundwork for a possible reconfiguration of Eurasian energy flows under post-conflict conditions. In this vision, transactions would be conducted through sovereign institutions, denominated in rubles, tenge, or other regional currencies. The intent is clear: to reduce reliance on Western frameworks and to re-anchor Russia’s “peripheries” within its institutional orbit. The maneuver unfolds within a broader context of strategic adjustment. Europe is searching for non-Russian energy inputs. Turkey is expanding corridor-based integration. China’s Belt and Road Initiative continues to institutionalize long-term infrastructural absorption. Kazakhstan has become a contested node within overlapping geopolitical networks that pull it in different vectorial directions. Against this backdrop, the once legal-technical re-negotiations over Tengiz, Karachaganak, and Kashagan are situated within a tectonically shifting geopolitical matrix. Trans-Caspian connectors, digital corridors, and regulatory frameworks are coalescing into a new infrastructural logic. The decree has little practical effect for now, but it points to a deeper condition where sovereignty is declared but not...

Oil

New Russian Regulations Halt Kazakhstan’s Black Sea Oil Exports

Kazakhstan has temporarily suspended oil exports via the Black Sea ports of Novorossiysk and Yuzhnaya Ozerovka due to newly enforced Russian regulations. The rules, which took effect on July 21, require foreign vessels entering Russian ports to receive prior approval from the Federal Security Service (FSB) and the port captain. Strategic Ports, Vulnerable Logistics According to Reuters, the new clearance procedures have effectively blocked shipments of Kazakh crude transported through the Caspian Pipeline Consortium (CPC) system. The disruption could reduce global oil supply by more than 2% (source). Over 80% of Kazakhstan’s oil exports are shipped through terminals in Novorossiysk and Yuzhnaya Ozerovka. The primary export product is CPC Blend, produced by major Kazakh oil firms, including ventures with significant American corporate participation. The decree by President Vladimir Putin, issued earlier this month, was introduced amid rising maritime threats. In 2025 alone, five tanker explosions have occurred in the region. One of the most serious incidents involved the tanker Koala, which was damaged in February while docked in the Russian port of Ust-Luga. Despite suspicions, none of the targeted tankers were carrying Russian crude sold above the G7 price cap. Tracking data revealed that each vessel had visited ports used for Kazakh oil exports, which are not subject to Western sanctions, according to the Financial Times. The CPC had planned to export 6.5 million tons of CPC Blend in August, maintaining the July level. Of that, 2.2 million tons were shipped via Novorossiysk. Mounting Risks, Limited Alternatives The security of Kazakhstan’s energy infrastructure is further threatened by ongoing regional instability. In February, seven Ukrainian drones attacked the CPC’s Krokotinskaya oil pumping station. While there were fears of a 30% drop in throughput, Kazakhstan’s Ministry of Energy denied any disruption, stating that “oil is being received according to schedule”. Financial analyst Rasul Rysmambetov, writing on his Telegram channel ArtFinanze, urged restraint but acknowledged the seriousness of the situation: “If attacks on infrastructure continue, it will become increasingly difficult to protect the underwater pipeline system.” He also warned that the involvement of Western firms such as Chevron may not deter further risks: “Contrary to popular belief, the participation of companies such as Chevron will not stop anyone. On the contrary, such infrastructure can be used to put pressure on entire countries”. Currently, nearly all of Kazakhstan’s oil exports transit Russian territory. The CPC handles 80%, while another 13% flows through the Atyrau-Samara pipeline, connected to Russia’s Transneft system. The remaining 7% is routed via the Kazakhstan, China pipeline, the Baku-Tbilisi-Ceyhan (BTC) pipeline, and railways. Even if capacity on the BTC route is expanded to 3 million tons annually, it would barely compensate for the over 60 million tons currently exported through the CPC system. Despite frequent official calls for diversification since 2022, Kazakhstan’s oil export infrastructure remains acutely vulnerable, highly dependent on transit decisions made by foreign governments.