ASTANA – Energy industry leaders and experts discussed the stakes of ensuring energy security, what it takes to balance energy transition and sustainability, and the future of the oil and gas industry at a panel session during the Astana International Forum (AIF) on May 29.
The theme of energy security drew a full room of guests. Photo credit: AIF
AIF, a global dialogue platform, began in the Kazakh capital on May 29 and continues on May 30. The event brought together around 5,000 delegates to discuss the world’s pressing issues, including connectivity, water security, and trade wars.
Kazakhstan’s take on energy security
Addressing the full room, Kazakhstan’s Vice Minister of Energy Alibek Zhamauov noted that energy security has remained a key issue on the global agenda.
“The topic of energy security takes on the central role of the global agenda, where the world community faces major challenges maintaining the stable economic growth, technological development, stability of energy supplies, and decarbonization of the industry,” said Zhamauov.
Alibek Zhamauov. Photo credit: AIF
He highlighted that the oil and gas sector remains the nation’s key driver of economic growth, accounting for nearly a quarter of the GDP. In 2024, 16 projects worth more than four billion tenge (US$7.9 million) were commissioned, a result of what Zhamauov described as the ministry’s efforts to improve the regulatory framework.
“The government has introduced the improved model contract, which provides a significant package of regulatory and fiscal preferences for geological exploration and further development of depleting fields. The mechanism will additionally attract up to 200 billion tenge [US$393.2 million] annually and increase oil production at major fields to 60 million tons by 2045,” said the Kazakh official.
Oil production reached 47.7 million tons in 2024, and plans are in place to increase it to over 100 million tons per year.
“For this, the government is taking necessary measures to develop new fields and diversify transportation routes. In this regard, the CPC pipeline is the most efficient route for exporting Kazakh oil. By the end of 2024, 55 million tons of Kazakh oil were transported via the CPC pipeline, and 57 million tons are planned for next year,” he said.
Diversification of export routes also occurs via the Baku-Tbilisi-Ceyhan route, with an annual volume of 1.5 million tons, the Trans-Caspian international transport route, also known as the Middle Corridor, and the Atyrau-Samara pipeline through Druzhba, heading in the direction of Germany.
Zhamauov also stressed that developing the petrochemical industry is a top priority within the country’s broader oil and gas strategy. He noted that several major projects are currently underway, including a polypropylene production plant that was commissioned in 2022 with an annual capacity of 5,000 tons. Another significant effort, a polyethylene facility projected to produce 1.2 million tons annually, is in the early stages of construction and is expected to be completed by 2029.
Despite growing global momentum toward carbon neutrality, Zhamauov is confident in the continued growth of Kazakhstan’s oil and gas industry.
Oil and gas to stay
That focus on energy security and the continued importance of hydrocarbons was echoed by global industry leaders attending the panel session. Among them is Peter Larden, senior vice president at ExxonMobil Corporation, who outlined some trends that can shape the future of the industry.
“As we look forward, certainly for the next half a century through 2050, we see the world quite differently than it is today. We anticipate that the global population will rise to about 10 billion people, and coupled with improved standards of living that we expect across the world as well, particularly in developing countries, we’d anticipate that about a 15% increase in energy demand is required, or will be required, to meet society’s needs,” he explained.
He is sure oil and gas will continue to play a “really important role.”
Peter Larden. Photo credit: AIF
“By 2050, we estimate that around 50% of the world’s energy mix will be oil and gas, which is really important for a country like Kazakhstan. Of course, oil and gas are still going to be critical to industrial processes, manufacturing, and heavy transportation industries. When we think about oil specifically, we would expect that across that same time frame, oil will plateau around about 100 million barrels a day, despite the fact that renewable energy sources and lower carbon energy sources will start to grow,” said Larden.
Opportunities for Kazakhstan
This is where Kazakhstan can seize opportunities, he added, considering the nation’s strategic location. But just having resources isn’t sufficient.
“You also have to have a really attractive and a really well-understood investment climate. I think that is the key as we think forward here about the global energy demand and the role that each country can play in that regard,” said Larden.
“Our experience says that when you have an attractive investment climate, which is underpinned by sound fiscals, regulatory certainty and a robust legal framework, they are the key ingredients to attract the type of investments and the type of decisions from foreign investors that underpin multi-decade, multi-billion dollar investments. For us, that is what we are looking for as we scan the global landscape to support global energy growth,” Larden said.
Two sides of a coin
Some experts have been watching a broader picture with cautious optimism. Matthew J. Sagers, vice president for energy at S&P Global, points to two key trends he has observed in Kazakhstan. One is “worrying,” and the other is “positive,” though, as he put it, it is still uncertain which direction will ultimately prevail.
“On the worrying side, upstream investment in fixed capital has dropped from a peak of $12.8 billion in 2019 to $4.8 billion last year. I can almost hear the air going out of the room. The share of upstream investment has dropped from about 49% in Kazakhstan to about 29%. That would be very worrying. Is the era of big oil over in Kazakhstan or not? Can Kazakhstan attract new upstream investments to basically lift this again? This is kind of the question that we have been looking at here overall,” said Sagers.
Matthew J. Sagers. Photo credit: AIF
While acknowledging the complexity of the current landscape, on the positive side, he pointed to a rebound in electric power investment, which has risen to around $2.1–$2.2 billion annually. This, he noted, is a notable improvement, but still modest given the scale of the sector.
“The other thing is that when you look at what’s happened to overall investment in the economy, it’s been rising overall. Total fixed capital investment last year was $41 billion. It’s been clipping along since the pandemic at almost double digits when you measure in tenge,” he said.
There is also a dual dynamic that one should be cautious about. While upstream oil development is largely dictated by international market forces, domestic sectors such as electricity and gas pricing have a direct impact on the population.
“You do need to basically raise prices to generate the capital, accumulate the capital to lift citizens. But at the same time, you have to be careful not to go beyond what their affordability is. It is a very difficult line to walk, but that’s what you are called to do as leaders. This is what it is all about. No one said this would be easy,” said Sagers.
Sagers still expressed a hopeful tone, commending Kazakhstan’s steady management over the past three decades and expressing confidence in its future. With a growing pool of educated and skilled citizens, he said that the country is well-positioned to continue its transformation.
Three key aspects of energy security
Dario Liguti, director for sustainable energy at the UN Economic Commission for Europe (UNECE), said energy security shouldn’t be confused with energy isolation or energy independence. Instead, global resilience depends on interdependence, through regional grid connectivity and cross-border energy trade.
Liguti offered a broader perspective on the well-known energy trilemma—balancing affordability, reliability, and sustainability—reframing it as a question of resilience.
“All of these three issues need to be looked at very closely, and by looking at that and the trade-off that you have between these three issues, this is how you build a resilient energy system. Resilient energy systems, coming back to your question, it is enhanced by energy collaboration, energy cooperation between countries, between neighboring countries,” he said.
Dario Liguti. Photo credit: AIF
Kazakhstan, he said, has “plenty of opportunities” to become Central Asia’s energy powerhouse. However, he warned that the region still grapples with high energy intensity, which stands just behind the Middle Eastern countries.
Overall, he stressed Kazakhstan has a “great future” not only in oil and gas, but also in renewables. Ultimately, the country’s energy future hinges on a diversified and balanced mix of energy sources.
Liguti also mentioned Kazakhstan’s decision to embrace nuclear energy with its first nuclear power plant in the making.
“Therefore, having a diversified portfolio of energy sources is another aspect that enhances energy security, affordability, and reliability at the same time, particularly as we are facing climate change,” he said, highlighting the latter as an “uncertain variable.”
Another crucial area for Kazakhstan and the Central Asian region, he noted, is the critical raw minerals and the important role they play in the energy transition.
“The energy transition requires an incredible amount of critical raw minerals according to today’s technology. Those technologies will evolve, and those needs will change over time. We have already seen in batteries, for example, that new technologies are coming up, and costs are coming down. That will continue to happen. But here, particularly in Kazakhstan as well, there is a huge opportunity to look at the role of critical raw minerals in supporting that,” he explained.
These minerals can be instrumental in anchoring new value chains not just for trade, but for domestic energy production across various sources. Liguti noted that while Kazakhstan and its Central Asian neighbors are beginning to recognize and harness these opportunities, regional and cross-regional cooperation remains crucial in fostering a robust and just energy transition.
The general partner and sponsors of the Astana International Forum are the Samruk Kazyna National Welfare Fund, ERG and Freedom Bank Kazakhstan. The official sponsors are Kazakhmys, Karachaganak, KAZ Minerals, North Caspian Operating Company, Tengizchevroil, Alatau City, Baiterek Holding, VISA, Stepnogorsk Bearing Plant, Caspian Oil, Qarmet and RG Gold.
