Hydrocarbon Subsoil Use Investments Surge to $8.6 Billion in First Half of 2023

ASTANA – Investments in hydrocarbon subsoil use soared by 110% to four trillion tenge ($8.6 billion) in the first half of this year, according to Kazakh Energy Minister Almasadam Satkaliyev. He announced these figures at a government meeting on Aug. 29, as reported by the Prime Minister’s press service.

Photo credit: inbusiness.kz.

Of this amount, 187 billion tenge ($405.2 million) was allocated for exploration, Satkaliyev added. Legislative changes enacted last year have facilitated the swift transition of contracts from exploration to production.

To attract investments, the government simplified subsoil use rights, introduced an improved model contract, and adopted new methods for calculating unconventional hydrocarbons. These measures enable better planning for the transition from refining light oil to heavy oil.

Vice Minister of Industry and Infrastructure Development Azamat Beispekov stated that Kazakhstan’s mineral resource base encompasses deposits of solid and common minerals, hydrocarbons, and groundwater.

Over the past 12 years, more than 2 trillion tenge ($4.3 billion) in private investment has been directed towards geological exploration. The largest share of this investment has been spent on studying hydrocarbons, with 479.7 billion tenge ($1 billion) allocated for solid minerals.

According to Beispekov, the state conducts geological studies of the subsoil in two key areas: regional research and prospecting. Currently, geological studies cover 94.5% of Kazakhstan’s territory.

State funding for exploration in Kazakhstan is relatively low, at $8 per square kilometer, compared to countries like Australia ($167) and Canada ($203).

“Prospecting work is ongoing at 16 sites to support city-forming enterprises and at 12 sites for the development of the rare earth metals industry,” the vice minister said.

Digitizing Geological Information

Minister of Digital Development, Innovation, and Aerospace Industry Bagdat Mussin stated that the minerals.gov.kz platform, launched last year, provides information on locations, valid contracts, and geological survey results. Around 40,000 reports have been uploaded to the platform, with an additional 16,000 planned for upload by the end of the year.

The National Geological Service has also been established to support subsoil users and digitize geological information.

Processes such as license applications, license acquisition, and report filing have been automated to reduce bureaucracy. Integration with relevant state information systems is ongoing to streamline the issuance of licenses, Mussin noted.

“The total number of platform users has reached 1,519. A total of 315 electronic applications have been submitted for exploration and processing,” he added.

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