Atyrau Oil & Gas
Kazakhstan❜s Oil and Gas Sector in 2025: Between a Record and the Outlines of a New Strategy
The past year was a period of quantitative growth for Kazakhstan’s oil and gas sector, alongside institutional shifts that, over the long term, may prove no less significant than the production metrics themselves.
Today, the fuel and energy sector accounts for 16% of GDP and more than 19% of total investment in the national economy. The oil and gas industry comprises about 1,350 companies that employ more than 240,000 people. These figures were cited by Minister of Energy Yerlan Akkenzhenov at the expanded collegium session summarizing 2025 results. On this basis, the sector once again confirmed its role as a structural foundation of the economy. At the same time, beyond the production and export figures reported at the collegium, the outlines of a new picture are emerging. The country is reinforcing its status as a major oil producer while, step by step, putting in place elements of a new model in which oil and gas production is no longer the sector's sole core focus.
A few more figures: in subsoil use, there are currently 321 contracts for hydrocarbon exploration and production in force, and as a result of electronic auctions held in 2025, 6 subsoil plots were awarded with a total signature bonus of 1.2 bln tenge and initial exploration investments of $45.5 mln.
Oil rests on three pillars
The year’s main achievement was a return to a steady growth trajectory in oil production, which, according to the Ministry, ultimately reached a record 99.55 mln tons, falling just short of the symbolic 100 mln ton mark. The result not only exceeded the initial forecasts but also effectively offset the previous year’s shortfall caused by technical constraints and maintenance shutdowns at key fields.
The record was driven by the commissioning of new capacity at the Tengiz field, with the commissioning act signed in June 2025. This brought the large-scale expansion project to completion and immediately impacted output. In 2025, Tengiz produced 39 mln tons (311.3 mln bbl) of crude oil. The increase was substantial enough to offset the natural decline at mature assets, including the Kumkol Group fields.
This effect is especially important in the context of long-term dynamics. Over the past decade, national oil production has depended on three megaprojects, Tengiz, Kashagan, and Karachaganak. Last year, they accounted for about 70% of total output, whereas a year earlier their share was only 58%. Stable performance across these three fields underpins national production, but it also creates vulnerability: any technological or infrastructure disruption is immediately reflected in macroeconomic indicators. The power supply incident at Tengiz on January 19, 2026, confirmed this, with nationwide production in January down 32.1% year over year. The KPI plant was forced to halt polypropylene production due to the lack of feedstock supplies from Tengiz and to urgently arrange supplies from Russia. What if, in the future, production stops at two of the three giants at the same time for some reason? Long-term resilience in oil production should therefore be a priority for the Ministry.
Exports: CPC still dominates
Crude oil exports from Kazakhstan totaled 78.7 mln tons in 2025, with the bulk shipped via the Caspian Pipeline Consortium (CPC). A total of 70.52 mln tons of oil was transported through the Tengiz–Novorossiysk pipeline system, including 36.6 mln tons from Tengiz, 9.2 mln tons from Karachaganak, and 17 mln tons from the Kashagan field.
This underscores Kazakhstan’s continued dependence on a single key route, despite years of diversification efforts. Alternative outlets, including shipments via the Baku–Tbilisi–Ceyhan pipeline, exports to Germany via the Druzhba pipeline, and supplies to China, have been expanding year by year, but for now they function more as elements of a backup architecture than as a full-scale alternative.
Refinery modernization and construction of a fourth plant
At the same time, growth in oil and gas production is gradually ceasing to be the only indicator of sector development. Refining, long viewed as a weak link, is playing an increasingly visible role. In 2025, crude oil refining reached 18.4 mln tons, enabling full domestic supply of the main fuel types and laying the groundwork for further deepening refining. Modernization and capacity expansion, including the development of the Caspi Bitum plant, reflect the state's intention to reduce dependence on petroleum product imports while increasing value added within the country.
“In our plans for 2026, the ministry has set the task of maintaining refining at 18.2 mln tons and petroleum products output at 15.49 mln tons, while, on the instruction of the Head of State, a special priority will be given to accelerated implementation of a new refinery project with a capacity of 10 mln tons,” Minister of Energy Erlan Akkenzhenov emphasized in his remarks.
In the near term, he said, an active phase will begin for expanding the capacities of the existing plants: Shymkent Refinery from 6 to 12 mln tons, Pavlodar Refinery from 5.5 to 9 mln tons, and Atyrau Refinery from 5.5 to 6.7 mln tons. Particular attention will be paid to increasing refining depth and raising jet fuel output, a significant share of which is still imported from Russia and China. To fully meet domestic road construction demand, the Ministry also plans to introduce a temporary ban on bitumen exports.
These plans indicate that Kazakhstan is gradually moving away from the logic of a raw-materials exporter toward a model in which refining is an equal partner in the sector. Over the long term, this could change the structure of export revenues by reducing dependence on fluctuations in global oil prices.
In parallel, albeit behind the original timelines, a new industry segment is also taking shape: gas chemicals. By the end of last year, output of oil and gas chemical products reached 619,000 tons, which exceeded planned indicators by 4.9%. Thanks to the stabilization of production processes at KPI LLP, a plant owned by KazMunayGas, polypropylene output increased last year by 51.4% from 2024 to 186,600 tons. Sales of polypropylene to the domestic market rose by 71.3% to 19,400 tons, while exports rose by 44% to 161,400 tons. The main increase was driven by shipments to Europe, Türkiye, and Russia.
The start of construction of a large polyethylene complex in the Atyrau Region and an alkylate plant in Pavlodar marks a shift toward more complex production chains. KazMunayGas, together with CNODC, a CNPC subsidiary, plans to build a gas chemical complex in the Aktobe Region that will produce up to 880,000 tons of urea and up to 80,000 tons of methanol per year. The Urea project is important for agricultural development and the country's food security. Total investment is estimated at $1.25 bln. The parties are currently at the stage of establishing a joint venture, after which they will proceed to develop project documentation (FEED, front-end engineering design).
All of these new projects are oriented not only toward the domestic market, but also toward exports, opening an opportunity for Kazakhstan to occupy a new niche in the global energy economy, no longer as a raw-material supplier, but as a producer of higher-value processed products. At the same time, Kazakhstan's economy is being diversified, gradually reducing dependence on exports of raw materials alone.
Gas flows
Last year, the gas sector posted strong growth, with production reaching 68.2 bln cu m, significantly exceeding planned targets. This growth resulted from both higher output at major fields and from new assets coming on stream, including the Barkhannaya field in Zhambyl Region. However, unlike oil, gas in Kazakhstan plays a dual role. It is both an export resource and the backbone of the domestic energy supply.
Rising gasification to more than 64% of the country's population has become one of the most tangible social effects of the sector's development. Gas is gradually replacing coal in the municipal sector, reducing environmental burdens and improving the quality of life. In this sense, the development of gas infrastructure goes beyond economics and becomes part of a broader national modernization strategy.
The national company QazaqGaz plays a key role in this transformation, simultaneously expanding the resource base, investing in processing, and modernizing the transportation system. Construction of new gas processing capacity at Kashagan and expansion of the Beineu-Bozoy-Shymkent trunk gas pipeline are forming the foundation for further sector growth. The Ministry of Energy’s plans for 2026 include construction and commissioning of a gas processing plant at the Kashagan field with a capacity of 1 bln cu m, obtaining a State Expert Review opinion for the KazGPP gas processing plant project in the city of Zhanaozen with a capacity of 0.9 bln cu m, and preparation, expert review, and approval of a feasibility study for the Kashagan gas processing plant project with a capacity of 2.5 bln cu m.
In the long term, the availability of processing capacity will be the key factor determining whether Kazakhstan can use its gas resources efficiently.
By the end of 2025, total trunk gas transportation amounted to 88.5 bln cu m. Five contracts were concluded (Maldybai, Shalkar, Akkuduk, Severny-2, Saralzhyn). Strategic partners were attracted for three blocks. For two blocks, exploration will be carried out by Razvedka i Dobycha QazaqGaz (LLP).
Agreements were signed with strategic partners: for the Severny-1 block, with CNPC for exploration work; for the Kamenkovsky block, with Eni for joint study. For the KT-III block, under an agreement with Chevron, processing and interpretation of 3D seismic data have been completed, and an economic assessment is being conducted. QazaqGaz also prepared a report analyzing prospective structures for establishing new underground gas storage facilities along trunk gas pipelines.