Kazakhstan’s extractive sector plays an important role in the country’s development, with revenues constituting more than half of the state budget. It has the largest recoverable crude oil reserves in Central Asia and its current oil production is approximately 1.73 million barrels a day. With much of the government revenue coming from the extractive sector, Kazakhstan was among the first Central Asian countries to announce its commitment to the EITI in 2005.
Kazakhstan has been lead in timely EITI reporting among Central Asian countries, having produced reports well ahead their deadlines. See the news items for publicaiton of the 2015 and 2014 EITI reports.
Kazakhstan’s extractive sector plays an important role in the country’s development, with revenues constituting more than one third of the state budget and more than half of the total exports in 2016. It has the largest recoverable crude oil reserves in Central Asia and its current oil production is approximately 1.8 million barrels a day. Atyrau, Mangistau and Western Kazakhstan continue to lead in oil and gas extraction. One of the biggest oil fields – Kashagan – started its oil production in October 2016. After eight years of delay, sixteen years of development and more than USD 50 billion of investment from NCSPSA (the North Caspian Sea Production Sharing Agreement) Consortium, operated by NCOC, the Kashagan oil field production, together with Tengiz and Karachaganak, is expected to be one of the main contributors to economic growth in Kazakhstan in the upcoming years. According to the latest data, in 2017, Kazakhstan produced a record volume – 86,2 million tonnes – of oil since gaining independence.
With much of the government revenue coming from the extractive sector, Kazakhstan was among the first Central Asian countries to announce its commitment to the EITI in 2005. Kazakhstan has been lead in timely EITI reporting among Central Asian countries, having produced reports well ahead their deadlines. See the news items for publication of the 2015 and 2016 EITI Reports.
Kazakhstan has initiated discussions around beneficial ownership disclosures in the country following the amendments to the EITI Standard in February 2016. According to the Requirement 2.5.b.ii. "it is required that by 1 January 2017, the MSG publishes a roadmap for disclosing beneficial ownership information in accordance with 2.5.c. and 2.5.f." In accordance with this requirement, Kazakhstan's beneficial ownership roadmap was published in December 2016 (see the document below).
Although new to the discussion of the beneficial ownership disclosures, Kazakhstan has already taken steps in bringing about changes in the country's legislature through launching discussions around amending the Subsoil and Subsoil Use Code. Following the establishment of the Interministerial Working Group on beneficial ownership disclosures in 2017, members of the EITI National Stakeholders Council agreed to pilot BO disclosures in their next EITI Report.
It is fascinating to see how the EITI reporting affected change in bringing more responsible management of the extractive sector in Kazakhstan beyond mere compliance to the requirements of the Standard.
Kazakhstan is a leading producer of oil in Central Asia. It is also a major producer of gas, gold, coal, iron, uranium, manganese, bauxite and chromite. Ongoing production is concentrated in 15 regions: Tengiz, Kashagan, Karachaganak, Uzen, Zhetybai, Zhanazhol, Kalamkas, Kenkiyak, Karazhanbas, Kumkol, North Buzachi, Alibekmola, Central and Eastern Prorva, Kenbai, Korolevskoye.
|Oil||3,9||billion tons||Kazakhstan has 1.8% of the world’s oil reserves.|
|Gas||1,5||trillion Sm3||Kazakhstan has 0.8% of the world’s gas reserves.|
|Coal||33,6||billion tons||Kazakhstan has 3.8% of the world’s coal reserves|
|Uranium||1,7||million tons||Kazakhstan is second in the world in terms of volumes of prospective reserves.|
|Iron||19||thousand metric tons|
|Bauxite||345||thousand metric tons|
|Chromite||366||thousand metric tons|
The 2015 EITI disclosures showed that Kazakhstan received a revenue of USD 12 billion from the extractive industry. Slightly more than half of these revenues came from hydrocarbons, mainly oil and gas, with the rest from mining, with iron, copper and gold as the major commodities. Revenues were mainly collected through taxes and royalties.
Revenue from the oil and gas sector is managed by the National Fund of Kazakhstan while revenue originating from the mining industry is managed by national and municipal governments, depending on the types of payment or tax (details are disclosed in Table 1 of the 2014 EITI Report). Revenue and expenditure reports are regularly published by the Ministry of Finance in the Statistical Bulletin.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- The National Stakeholders Council has expressed interest in taking part in the EITI mainstreaming pilot.
- Online reporting through EGSU.
- Reports include disclosure of social expenditures.
- EITI Reports led to change of classification codes to ensure that companies transfer social payments to the budget. Both local and central governments can now easily track the payments.
EITI implementation in Kazakhstan is led by the National Stakeholders Council (NSC). The NSC is chaired by Zhenis Mahmudovich Kassymbek, Minister Investments and Development of the Republic of Kazakhstan.
The NSC, together with the Ministry of Energy has taken the lead in mainstreaming EITI reporting by requesting that companies file their EITI reports as part of other mandatory reporting for subsoil license holders, using an existing online platform - EGSU. The system proved to be successful during the data collection processes in the past though Kazakh EITI team constantly works with the Ministry of Energy that hosts the data portal on its improvements.
As part of their effort to bring transparency to the extractive industry the NSC has agreed to take part in EITI mainstreaming pilot.
Scorecards show the outcomes of Validation. Arrows of progress indicate where the International Secretariat has re-assessed a requirement following a corrective action in a second or third Validation.
The reports demonstrate the extent to which our country’s budget is dependent on the extractives sector. The prudent use of these revenues, particularly with the most recent substantial decline in oil prices globally, is crucial for Kazakhstan’s development.
This EITI Report covers Kazakhstan's extractive sector in 2016. It was published in October 2017.
The Annual Progress Report provides an overview of all EITI Kazakhstan's activities during 2016.
This EITI Report covers Kazakhstan's extractive sector in 2015. It was published in November 2016.
This EITI Report covers Kazakhstan's extractive sector in 2014. It was published in September 2015.
This is the Kazakhstan EITI 2014 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
This is the Kazakhstan EITI 2014-2015 work plan (in accordance with Requirement 1.5).
This EITI Report covers Kazakhstan's extractive sector in 2013. It was published in December 2014.
EITI responsibilities: Support to EITI implementation and outreach in Asia.
Prior to joining the EITI in 2009, Dyveke worked for Xstrata Nickel in the Dominican Republic and at the Center for Development Studies at the University of Agder.
Oliana is Country Manager at the EITI International Secretariat working with Eastern Europe, the Caucasus and Central Asia. Nationality: Ukrainian Prior to joining the EITI in November 2015,
Olesia supports Asia team at the International Secretariat.
Olesia holds bachelor’s degree in Economic Theory from Ukraine and MSc in Strategic Marketing Management from Norway.