At the Government session, Deputy Minister of Energy Kairkhan Tutkyshbayev reported on ongoing work in hydrocarbon exploration.

He stated that as of today, the total number of subsoil use contracts for hydrocarbons stands at 324, including 15 for exploration, 170 for exploration and production, 131 for production, and 8 under production sharing agreements (PSAs).

“In 2023 and 2024, subsoil users invested approximately 150 billion tenge and 160 billion tenge, respectively, in geological exploration. During the first nine months of 2025, 80 billion tenge has already been invested. By the end of this year, investment levels are expected to remain on par with previous years,” Kairkhan Tutkyshbayev said.

It was noted that the oil industry employs around 220,000 people, encompassing extraction, processing, transportation, and oilfield services.

The Ministry of Energy is carrying out systematic and comprehensive work to improve and digitalize subsoil use processes. The main objective is to enhance transparency, efficiency, and governance, as well as improve the quality and speed of public service delivery to subsoil users.

The Ministry operates the Integrated Information System “Unified State Subsoil Use System (EGSU)”, which provides end-to-end digital management of subsoil operations.

This system automates the entire process cycle — from contract conclusion and administration to reporting and automatic notifications in case of non-compliance with contractual obligations. It includes 75 reporting forms, more than six integrations with government databases, and an electronic archive of contracts, annexes, and project documents.

In addition, the system has fully automated the state service for transferring subsoil use rights and related assets. Work is underway to convert all services for contract conclusion and amendments into fully digital format, replacing the current hybrid electronic-paper process.

Since 2020, the auction procedure has been fully automated, ensuring maximum openness and transparency, and is conducted via the e-qazyna.kz portal.

During the current year, the Ministry conducted two auctions, resulting in 11 contracts signed and 10.6 billion tenge paid to the budget. A total of $71.6 million in exploration investments has been attracted for the next six years.

“Within the EGSU system, notifications are now sent electronically. As part of the 2024 annual monitoring, 167 notifications were issued to subsoil users for violations of contractual obligations totaling around 19 billion tenge. To date, approximately 2 billion tenge has been repaid to the state budget. This work remains under constant ministerial supervision,” Kairkhan Tutkyshbayev emphasized.

The Ministry also continues to execute the President’s instruction to review subsoil plots that have been held for extended periods without meeting contractual obligations. This year, 17 contracts have been terminated, and the returned plots are being relisted for auction to attract new investment.

In line with the President’s directive to create new industries and increase the share of Kazakhstani goods, works, and services in oil and gas projects, the Ministry continues efforts to enhance local content.

Using the EGSU system, the Ministry regularly analyzes reports from subsoil users on local procurement levels and takes measures to increase the share of domestic producers and support their further development.

As a result, 41 contracts were signed this year between major operators (TCO, NCOC, KPO) and local manufacturers, totaling $467.8 million. Work in this direction is ongoing.

The Deputy Minister emphasized that the Head of State has repeatedly highlighted the importance of efficient and responsible use of natural resources, noting that the oil and gas industry requires new approaches, especially in geological exploration, comprehensive subsoil study, and attracting additional investment.

To stimulate exploration activity, the Parliamentary corps has initiated several important legislative amendments, including:

• Allowing the deepening of existing production blocks while maintaining their current boundaries. This will encourage the search for new deposits, increase investor interest, and provide the state with new geological data. Under current law, such deepening is possible only through an electronic auction, which does not guarantee access to new reserves for existing subsoil users.

• Under the Presidential Decree on Economic Liberalization (2024), it is proposed to limit the priority reservation period for national companies to three years, which will foster competition, attract potential investors, and accelerate exploration and industrial development of subsoil areas.

• To stimulate the development of hard-to-recover reserves (such as heavy and shale oil), the amendments expand the criteria defining complex projects. Such deposits require costly technologies and special fiscal conditions. Adoption of these amendments will allow the medium-term launch of deposits such as Sarybulak (heavy oil, East Kazakhstan) and Karagansay (shale oil, Kyzylorda) with recoverable reserves of 18.7 million tons (ABC1 + C2 categories). The draft law was approved in the second reading by the Mazhilis on November 5 of this year.

According to ministry data, Kazakhstan’s sedimentary basins contain approximately 76 billion tons of recoverable conventional fuel resources, 6 billion tons of which are located in underexplored or low-potential basins.

“As investors show little interest in underexplored territories, the draft law provides for granting subsoil users a guaranteed right to transition from geological study to exploration, subject to fulfillment of minimum work obligations. Alongside generating new geological data for the state, these innovations will attract additional investment in the long term. The Ministry will continue its systematic work to develop the national geological sector in hydrocarbons and ensure transparent subsoil use procedures through digitalization and automation tools,” Kairkhan Tutkyshbayev concluded.

#Geology #Government session #Investments

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