Post by PetroCouncil.kz

Prospects for the Oil and Gas Industry: A Dialogue Between the Adilet Party and Business. A strategic industry meeting was held in Astana at the Adilet party headquarters, chaired by Aibek Dadebay. The discussion brought together representatives from relevant ministries, the leadership of KMG and QazaqGaz, major operators (TCO, NCOC), petrochemical enterprises, and the oilfield services sector. During the open dialogue, experts and business representatives raised pressing issues regarding the industry's development. The heads of KMG and QazaqGaz presented their vision for future steps, while PetroCouncil outlined systemic challenges and proposed concrete solutions. Key Proposals from PetroCouncil emphasized that the era of simple raw material exports is coming to an end. Today, value added is driven by technology, engineering, and human capital. The following proposals were put forward: * Localization and In-Country Value: Shift from formal monitoring to active management. It is necessary to adopt a comprehensive document on localization development (modeled after the nuclear industry) and implement KPIs for local content within investment contracts. * Development of Localization: Consider introducing a recycling fee on imported equipment that has locally produced equivalents in Kazakhstan, with funds directed toward supporting domestic production. It was also proposed to include oil and gas engineering projects in the list of priority sectors for the "NINT" Special Economic Zone in the Atyrau region. * Petrochemicals: Create an industrial zone for polymer processing in the Atyrau region, develop a dedicated financing program for this initiative, and implement a gas-chemical complex based at the Karachaganak field. * Efficient Upstream: Establish a management company for the Aktoty–Kairan project (with parity participation between KMG and one Kashagan shareholder). To resolve issues related to bureaucracy and lengthy approval processes by all Kashagan shareholders, it is proposed to adopt an operating model similar to the KPO (rotating two key operators every 3 years). * Support for Oilfield Services: A 5–10 year "demand map" is critically important for companies in the sector. Experts noted that the average project margin is only 6–8%, while bank financing costs reach 20%. To stimulate industry growth, it was proposed to introduce affordable, concessional lending instruments. * Environment: Launch a national "Green Caspian" program to combat the consequences of the Caspian Sea’s receding water levels. The constructive dialogue between the state and the private sector hosted by the party marks an important step toward building a strong industrial foundation for the country.