Kazakhstan's Ministry of Energy has announced an electronic auction for the right to subsurface use for hydrocarbons. The bidding is scheduled for December 25 and will be held on the eQazyna platform, with applications closing on November 18. The upcoming auction offers 56 subsurface blocks out of the 112 planned for sale by the end of 2026, according to infohub.kz.
The oil and gas blocks are located in western Kazakhstan, as well as in the Mangystau, Aktobe, Atyrau, Ulytau, Kostanay and Kyzylorda regions. The state is auctioning rights for both exploration and production, as well as for production of hydrocarbons directly.
The approved list includes the Begimbet 1, Western Ulytau, Sholaksai, Baskumak, Karasu, Zhaskairat, the Ustyurt group of blocks, Kosaral, Mailykol, Karakamys and Karakol blocks.
Obtaining the right to subsurface use comes with requirements for businesses. Auction winners are obliged to prepare an exploration work project within one year of signing the contract. Within three years, investors must complete 2D seismic survey requirements, and within four years drill at least one well.
During the production period, companies are obliged to allocate 1% of the previous year's costs to training local personnel, 1% to financing scientific research, and another 1% of investments under the contract to the social and economic development of the region of presence.
The contracts stipulate strict local content quotas. The share of local content must be at least 70% in works, 70% in services and 30% in procurement of goods. Management personnel must be 80% Kazakhstani specialists, heads of structural subdivisions 90%, and the staff of technical specialists and qualified workers 100%.
Additional obligations are envisaged for large projects with reserves exceeding 100 million tonnes of oil or 50 billion cubic meters of natural gas. The investor will be obliged to create new or modernize existing processing capacities, or send the extracted raw materials for domestic processing.
In July of this year, the Ministry of Energy announced its intention to recover debts from unscrupulous subsurface users through the courts. The agency has begun active work on auditing the fulfillment of financial obligations under contracts.
In September, it became known that the introduction of a new royalty on the extraction of solid minerals had been postponed. Initially, the fiscal instrument was planned to be introduced in the near future, but the government decided to delay the reform until 2029 for a more detailed study of the burden on the raw materials sector.