Kazakhstan

EITI Status Meaningful progress
Joined EITI in 2007
Latest Data From 2017
Latest Validation 2019
Website EITI Kazakhstan
Last updated 21 October 2020

Overview

Kazakhstan’s extractive sector plays an important role in the country’s development. The oil and gas sector contributed 18.6% to GDP in 2017. 

Oil, gas, coal and metal ore are the main industries in Kazakhstan’s extractive sector. The country has the largest recoverable crude oil reserves in Central Asia and its current oil production is approximately 1.8 million barrels a day. According to the 2017 EITI Report, Kazakhstan produced a record volume of 86.2 million tonnes of oil since 1991.

Having rich energy resources, Kazakhstan has developed trade relations all over the world. Its largest commodity importers are Russia, Uzbekistan, Ukraine, China, Poland and Switzerland.

Extractive industries contribution

  • 22 %
    to GDP
  • 199800
    jobs
  • 34.7 bn
    in USD to export

Beneficial ownership disclosure

The Government of Kazakhstan implements the Code on Subsoil and Subsoil Use which was appoved in December 2017 and includes rules that reinforce the requirement for subsoil users to provide a report on the composition of persons and (or) organizations that directly or indirectly control the subsoil use. 

In June 2019, the Ministry of Industry and Infrastructure Development disclosed for the first time beneficial ownership data on its website. The data include names of beneficial owners and their level of ownership. However, the data only covers new licenses and is not yet available in open data format.

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 2017 EITI Report reveals that Kazakhstan received a revenue of USD 19 billion from the extractive industry in 2017. More than half (52.4%) of these revenues came from hydrocarbons, and the remaining revenues were derived from mining, with iron, copper and gold as the major commodities. Of these revenues, 23% were allocated to the National Fund (it accumulates part of the revenues generated by the extractive sector of the economy with favorable pricing conditions, so that, on the one hand, they can be saved for future generations, and on the other, to maintain the necessary level of government spending, primarily social, in the event of a fall in oil prices). Revenues were mainly collected through direct taxes from oil sector organisations such as corporate income tax, excess profit tax, bonuses etc.

Initializing chart.

Reconciled revenues by company (top 5)

Revenue allocation

Taxes from companies in the oil and gas sector, defined by the list approved annually by the Ministry of Finance of Kazakhstan and the Ministry of Economy of Kazakhstan, are sent to the National Fund of Kazakhstan for taxes and payments defined by law. The exception is the export customs duty (ETP) for crude oil, which is sent to the republican budget. Other taxes and payments, as well as taxes from other companies of the mining sector, go to the republican budget and local budgets and are not allocated from taxes received from other sectors of the economy.

Revenue and expenditure reports are regularly published by the Ministry of Finance in the Statistical Bulletin.

Innovations

The EITI multi-stakeholder group is working on transitions towards systematic disclosure to explore innovative approaches to make the EITI more relevant and useful. So far, this transition has resulted in:

  • The National Stakeholders Council has expressed interest in transition to the systematic disclosure.
  • Online reporting of company data through United State System of Subsoil Use Management of the Republic of Kazakhstan (EGSU).

In addition, oil, gas and mining companies began disclosing beneficial ownership information in 2019.

Implementation

EITI implementation in Kazakhstan is led by the National Stakeholders Council (NSC). The NSC is chaired by the 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 (EGSU) online platform.

Timeline

Validation

The second Validation of Kazakhstan commenced on 13 August 2019. On 14 April 2020, the Board agreed that Kazakhstan has made meaningful progress in implementing the 2016 EITI Standard, with considerable improvements.

The Board has determined that Kazakhstan will have 18 months before a third Validation, i.e. until 14 October 2021, to carry out corrective actions regarding MSG oversight (Requirement 1.4), license allocations (Requirement 2.2), state participation (Requirement 2.6), production data (Requirement 3.2), barter arrangements (Requirement 4.3), transport revenues (Requirement 4.4), social expenditures (Requirement 6.1) and quasi-fiscal expenditures (Requirement 6.2). 

View more information below or go to the Board's decision in full.

Kazakhstan's progress by requirement

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