The Ministry of Energy has announced an electronic auction for the granting of subsoil use rights for hydrocarbons. The blocks will be put up for auction on December 25 on the eQazyna platform, with applications closing on November 18. The upcoming auction will offer 56 subsoil blocks out of 112 planned for sale by the end of 2026. This was reported by Qazaqyia.kz citing Kursiv Media.
Where the blocks are located
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 selling subsoil use rights both for exploration and production, and directly for hydrocarbon production.
The approved list includes the Begimbet 1, Western Ulytau, Sholaksai, Baskumak, Karasu, Zhaskairat, the group of Ustyurt blocks, Kosaral, Mailykol, Karakamys and Karakol blocks.
Requirements for business
Obtaining subsoil use rights comes with requirements for business. Auction winners are obliged to prepare an exploration work project within one year from the conclusion of the contract. Within three years, investors must fulfill requirements for 2D seismic surveys, 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. The management of enterprises must consist of 80% Kazakhstani specialists, the composition of heads of structural subdivisions at 90%, and the staff of technical specialists and qualified workers at 100%.
Additional obligations for large projects
For large projects with reserves exceeding 100 million tonnes of oil or 50 billion cubic meters of natural gas, additional obligations are envisaged. The investor will be obliged to create new or modernize existing processing capacities, or send the extracted raw materials for domestic processing.
Tax and audit issues
In July of this year, the Ministry of Energy announced its intention to recover debts from unscrupulous subsoil 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 timing for introducing a new royalty on the extraction of solid minerals had been postponed. Initially, it was planned to introduce this fiscal instrument in the near future, but the government decided to postpone the reform until 2029 for a more detailed study of the burden on the raw materials sector.