Kazakhstan

EITI Status Yet to be assessed against the 2016 Standard
EITI Member Since 2007
Latest Data From 2015
Website EITI Kazakhstan

Overview

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.

Extractive industries contribution

  • 60.8 %
    to GDP
  • 204 769
    jobs
  • 27.6 bn
    in USD to export

Beneficial ownership disclosure

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.
Ruslan Baimishev, National Coordinator

Production

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.

Natural resources

CommodityReservesUnitSignificance
Oil3,9billion tonsKazakhstan has 1.8% of the world’s oil reserves.
Gas1,5trillion Sm3Kazakhstan has 0.8% of the world’s gas reserves.
Coal33,6billion tonsKazakhstan has 3.8% of the world’s coal reserves
Gold213,50tons
Uranium1,7million tonsKazakhstan is second in the world in terms of volumes of prospective reserves.
Iron19thousand metric tons
Manganese700thousand
Bauxite345thousand metric tons
Chromite366thousand metric tons

Initializing chart.

Initializing chart.

Revenue collection

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.

Initializing chart.

Reconciled revenues by company (top 5)

Revenue allocation

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.

Innovations

​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.

Implementation

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.

Timeline

Validation

Kazakhstan’s Validation against the Standard will commence on 1 July 2017. The country is compliant under the 2011 Rules.

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.
Maria Lobacheva from Almaty-based civil society organisation Echo.