About 800 excessive requirements for business to be reduced in oil and gas industry in Kazakhstan

The topical issues and plans for the development of the oil and gas industry were discussed at the meeting of the Council of Domestic Entrepreneurs, chaired by Prime Minister Alikhan Smailov. 

Opening the meeting, the Head of Government stressed that the oil and gas industry remains one of the main sectors of the republic's economy. Since gaining independence, the volume of oil and gas condensate production in the country has increased by more than three and a half times: from 25 million to 90 million tons per year. According to OPEC, Kazakhstan is now one of the top 10 oil exporters.

"In general, our oil and gas industry is actively developing and follows global trends. Necessary measures are taken for this purpose, from increasing the efficiency of production to the expansion of refining facilities," he said.

Minister of Energy Bolat Akchulakov said that in order to attract additional investments in exploration, the Improved Model Contract was introduced, which provides a package of regulatory and fiscal preferences for complex projects for exploration and production of hydrocarbons, including gas. In 2023, the first such contract has already been signed with an investment of $6 billion. The signing of another one with an expected investment of about $2 billion is under consideration.

In addition, measures have been taken to simplify electronic auctions in the industry. This year the work will be continued to simplify procedures in the sphere of subsoil use for quick commissioning of the fields.

As part of the reorientation of the oil and gas sector from raw material orientation to high value-added products, the oil and gas chemical industry is actively developing. In particular, at the end of last year, one of the world's largest petrochemical plants for the production of polypropylene with a capacity of 500 thousand tons was launched, which allows to fully cover the domestic demand of the republic. Besides four more big projects on production of polyethylene, butadiene and its derivatives and polyethylene terephthalate with total investments of $12 bln are being implemented.

In the future, the Ministry of Energy plans to take measures for import substitution and linking the needs of various sectors of the national economy with the capabilities of the oil and gas chemical industry, the introduction of standards for new products and improvement of the regulatory framework. 

The Prime Minister pointed out that all these steps should be taken now at the level of by-laws, without waiting for a separate law. 

During the meeting the participants discussed taxation, geological development, compliance with environmental requirements, oil export, greater transparency in the industry as a whole and a number of other issues. Heads of the Ministry of Energy, Ministry of Ecology, Ministry of Industry and other agencies gave detailed comments and explanations on each topic. 

Summing up the discussion, Prime Minister noted that the dynamic development of the oil and gas industry is an important process for the entire economy. In this regard, he stressed the need to accelerate the application of the improved model contract to attract more investment and to continue to reduce the administrative burden on business.

"In the near future there are plans to reduce about 800 different redundant requirements for the oil and gas industry. These measures are taken in close cooperation with the business community and the National Chamber Atameken. The government is ready to continue working in such a constructive manner," the Prime Minister stressed.

In conclusion, Alikhan Smailov has instructed the Energy Ministry to consider the proposals voiced during the meeting and to find ways to solve the issues raised while maintaining the balance between the interests of the state and private investors.

The heads of the central state bodies, the Presidium and key committees of Atameken NCE, representatives of large industry unions, associations and private companies, the Ombudsman for Protection of Entrepreneurs' Rights of the Republic of Kazakhstan and others took part in the Council meeting.

Stay updated about the events of the Prime Minister and the Government of Kazakhstan - subscribe to the official Telegram channel