Kazakhstan: US $30 billion government revenue per year

Range of new disclosures: oil and gas transport tariffs and social payments.

Kazakhstan has released its 2012 and 2013 EITI Reports. They document revenues of just over US $30 billion for each year. Oil and gas revenues were responsible for 93% of the revenue from the sector, with mining accounting for the remaining 7%. Revenue from the extractives sector has steadily increased between 2005 and 2011 from around US $2.5bn to $38bn.

With a population of just 16 million, Kazakhstan is heavily endowed with natural resources. In 2013, it produced over 570 million barrels of oil, 40 billion cubic meters of natural gas, 50 tonnes of gold, 20 tonnes of uranium, 500,000 tonnes of copper, 100,000 tonnes of lead, 300,000 of zinc and 100m tonnes of coal.

The above infographic shows the national fund Samruk-Kazyna’s domination across of a number of key industries, first and foremost with 100% ownership of gas company KazMunayGaz. Samruk-Kazyna also owns 100% of KazAtomProm (uranium and rare metals) and 100% of KazTemirZholy, the state railway.

The Head of the State Committee on Geology Bazarbai Nurabayev commented, “Our forthcoming summary report will make the detailed information contained in these reports even more accessible to our citizens.”

Company information available online

With 97 oil and gas companies and 106 mining companies participating, the EITI process is no small undertaking. For the first time, Kazakhstan used an online reporting template, which facilitated and quickened the reporting process.

Mr. Naurbaev continues, “I am particularly pleased with the availability of electronic versions of the EITI reports through the country’s tax portal and the streamlining of the reporting process. Anyone can go onto the portal and search which company paid which tax.”

For the first time, the EITI Report includes information about each company’s payments into social projects, such as health and education. Social projects are a feature of many of Kazakhstan’s oil and gas agreements and the costs can be quite substantial for companies. Spending on the social projects can now be tracked on line.

In addition, transit of oil and gas is a billion dollar business. Both reports include oil and gas tariff rates, individual company payments, information on new pipelines, and a set up of the structure of the main state-owned enterprises - KazTransOil, KazTransGas - and their subsidies.

Resource-rich country in a challenging and changing environment

The oil and gas sector generated about 25% of Kazakhstan’s GDP in 2013. Mining accounted for a further 5%. Revenues from the oil and gas sector generate a half of fiscal revenues of the country. Export of oil and gas condensate is about 70% of Kazakhstan’s total exports.

Two of Kazakhstan’s largest projects, the North Caspian Operating Company (NCOC) and Tengizchevroil (TCO), hold 45% and 26% respectively of proven reserves. At US $40 billion, the NCOC project and its flagship Kashagan field, one of the world’s largest exploration and production projects,  started production in 2013. However, a gas leak shortly after halted the project and forced a 50+ kilometre pipeline replacement. It is unclear when the project will restart.

TCO is slowly increasing production to its current peak of 27 million tonnes. The government and TCO’s shareholders (Chevron, ExxonMobil, KazMunaygas and Lukoil) signed a US $23 billion expansion plan in 2013, which will bring production to 38 million tonnes and employ 20,000 people,  It is scheduled to be finished by 2018.

Maria Lobacheva from Almaty-based civil society organization “Echo” underlined the importance of the publication of detailed information: “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.”

 

Further information on the disaggregated reports can be found at: http://geology.gov.kz/en/initsiativa-prozrachnosti-dobyvayushchikh-otraslej

Kazakhstan became an EITI compliant country in October 2013. For more information on Kazakhstan and the EITI, visit the country page eiti.org/Kazakhstan.