– Yerlan Kudaibergenovich, the extractive sector has traditionally served as the foundation of the state’s macroeconomy. Do our current raw material production volumes cover both the republic’s domestic needs and our external international contracts?
– We are seeing stable, confident momentum. Last year, the industry delivered an excellent result: oil production indicators approached their historical highs. The drivers here are, naturally, our key megaprojects. The Future Growth Project facilities commissioned at Tengiz, along with the stable operation of Kashagan and Karachaganak, generate the bulk of supplies. This “big three” accounts for a substantial share of our portfolio, while we also see a significant contribution from dozens of other domestic fields: together, they provide the country with more than one-third of the total volume.
These macroeconomic indicators make it possible to reliably replenish the National Fund and the state budget through international transit, while fully supplying our domestic market with resources. The ministry worked out additional routing for export supplies in advance: pipeline shipments eastward toward China are increasing, and capacity in the Caspian Sea waters is being actively expanded. Strict logistics diversification guarantees a stable inflow of foreign currency revenue into the economy and the steady replenishment of Kazakhstan’s sovereign reserves.
– Experts note that the era of easy oil is coming to an end. Deposits are being depleted or are lying ever deeper. What arguments is the state using today to motivate major transnational corporations to enter our geological exploration sector?
– The global hydrocarbons market has changed dramatically, and competition for capital among countries has intensified. We understand with absolute clarity that developing complex or deep horizons requires a completely different financial model for the investor. The industry must work with a long-term perspective, which is why the ministry developed and introduced the so-called Improved Model Subsoil Use Contract. The state provides companies with fiscal preferences, guarantees of tax regime stability, and legal protection for capital investments. In return, the investor brings us modern production technologies and creates quality jobs. Under these conditions, it becomes profitable for companies to work on complex projects. The global market needs fixed rules of the game for twenty to thirty years ahead. And we provide those guarantees.
– Producing millions of tons of oil is only half the job. For many years, economists have criticized the model of selling exclusively crude hydrocarbon. When will Kazakhstani oil begin generating superprofits within the country?
– A structural shift is already underway, and this vector is firmly enshrined in the sector-specific Development Concept until 2040. The ministry is deliberately breaking the old paradigm. We are increasing the share of high-quality oil from our fields in direct supplies to domestic oil refineries. High-quality feedstock, combined with modern technologies, allows us to radically increase refining depth — the indicator will be brought to 94%. The Nelson Complexity Index at our flagship oil refineries has surpassed global average indicators of technological sophistication.
We are extracting fundamentally different margin from every barrel directed into the domestic market. The output of low-yield heating fuel oil is being consistently reduced. The freed-up capacities are being redirected toward light hydrocarbons and, going forward, aromatic hydrocarbons. Already today, the production of benzene and paraxylene has increased significantly. These are products of advanced chemical conversion stages. Passing basic feedstock through synthesis into this kind of chemistry automatically raises the price of the final export product by two to three times. Extracting maximum added value here, within the country, is a key macroeconomic objective of our ministry.
– Is scaling up this base the main goal of the announced construction of a new fourth oil refinery?
– Absolutely. The country’s growing industrial potential, transport sector, and aviation hubs require uninterrupted supplies. The construction of a giant fourth oil refining complex with a capacity of 10 million tons is an absolute strategic imperative.
Today, an independent international engineering team will begin preparing the core pre-design studies (Pre-FEED study). Specialists are determining the technical configuration of the feedstock, logistics hubs, and assessing the optimal construction parameters. This large-scale plant is being designed from the outset as the core of a huge petrochemical cluster. The industry is shifting away from the straightforward sale of oil toward the production of polymers and high-performance engineering plastics. We are laying the foundation for the development of hundreds of high-tech manufacturing operations across the republic. The final investment decision will be made based on the project’s strict profitability.
– But any such production capacity depends on reliable domestic heat and electricity infrastructure. You yourself mentioned that our core networks are outdated. How do you assess the strength of the power system today?
– For a long time, Kazakhstan’s energy sector was running on the legacy of the last century. Infrastructure was aging, and equipment wear was steadily increasing. At the same time, large-scale construction of new residential districts was unfolding in the major cities, and factories were opening. An imbalance emerged: demand significantly outpaced the supply capacity of the old generating base.
The ministry has radically changed its operating philosophy in the sector. Carrying out repairs in emergency mode after a pipe bursts in the middle of winter frost is a vulnerable model. We have shifted the attention of the entire industry to the systematic, planned, and deep reconstruction of the country’s combined heat and power plants and grids. This cannot be done overnight across the entire republic, but the direction of work has been set. The acceleration of overhauls was achieved in large part thanks to the state program Tariff in Exchange for Investment.
We are now structuring the modernization of energy units through a clear business approach. For infrastructure to function and supply power, it requires massive injections of funding, which we are providing by changing the payback conditions for generating entities. The energy sector has begun receiving the necessary funds for renewal.
– Was it precisely because of this investment need that citizens saw higher utility bills? Are you confident that all the money collected under the new tariffs reached the CHP plant repair funds?
– For many decades in our country, prices per gigacalorie and megawatt were artificially frozen. Heat and electricity were so cheap that plant owners simply had no way to buy new turbines, pay for expensive boilers, and retain engineers in their jobs. Further artificial restraint of tariffs at the cost of critical equipment wear became impossible: the reliability and safety of urban heat supply were at stake. The decision to raise tariffs was an economically difficult, unpopular, but life-saving step for the energy sector. At the same time, we built a social protection framework for vulnerable population groups through targeted assistance.
And today, every last kopeck of the funds received is subject to the strictest scrutiny. The result of this transparency became evident during the recent winter. For our dispatch services, the successful passage of the autumn-winter period must be the standard. During the off-heating season, we carried out comprehensive work—among the most intensive in the country’s history: at dozens of CHP plants and state district power plants across Kazakhstan, power units, boiler units, and generators were thoroughly upgraded. Grid operators brought nearly 17,000 km of transmission lines into compliance with standards. Hundreds of kilometers of critically important sections of heating mains were replaced.
All investments are reflected in the hard facts of macrostatistics.
The frequency of incidents at plants declined by 15% over the season, while the accident rate on the networks fell by 12%. The number of recorded temperature deviations dropped threefold at once. As many as five CHP plants previously considered deeply problematic confidently moved into safe technical status. The figures clearly show that the new financial injections went into metal and labor, rather than vanishing into thin air.
– Winter is over, but the energy sector is a continuous process. At what stage is preparation for future peak loads?
– Relaxing is not our way. We began implementing the new plan immediately: clear schedules have been set for the start of new overhauls, and the procurement process for key component materials has begun. The industry is returning to strict production discipline at every point.
Looking ahead, we are continuing to increase heat capacity in the regions. Economically justified decisions have been adopted on the creation of new CHP plants. At a strategically important facility—the construction of the CHP plant in Kokshetau—site grading began as early as last autumn. Oversight has been transferred to the reliable management of the specialized Samruk-Energy structure, and the process has been shifted onto an exclusively practical track.
– Let us sum up. How is global digitalization affecting such a heavyweight industry, full of huge generators and miles-long pipes? Will it help prevent collapses before they happen?
– Digital solutions are already being actively used in domestic infrastructure. Modern generation facilities and processing enterprises create massive Big Data sets every second. These include pressure readings, load amplitudes, and burnout schedules.
The Ministry of Energy of the Republic of Kazakhstan, together with the largest energy operators, is gradually introducing predictive systems. With their help, software systems are able to assess the density of wear in a metal pipe on any segment of the network in real time, making it possible to prevent its failure even before a microleak occurs. Intelligent modules track the parameters of the most outdated sections of trunk lines. Automation analyzes areas of heat losses and shows which specific substation it is more effective to direct repair investments to for maximum efficiency. On a different front, we have established secure digital processes for public procurement of equipment that completely eliminate manual human intervention.
The introduction of strict economic calculation and modern automated monitoring algorithms is the very foundation of the new technological architecture of the energy industry that the state is now successfully building in Kazakhstan
