NUR-SULTAN

Kazakhstan plans to attract around 3.9 trillion tenge ($9.1 billion) of investment in oil and gas chemical projects over the next five years, Nurlan Nogayev, the energy minister, said.

“In the period from 2021-2025, investments of about 3.9 trillion tenge will be attracted for the implementation of oil and gas chemical projects,” Nogayev told the parliament.

Kazakhstan sits on some of the most impressive natural resources in the world. Foreign energy majors poured into the country in the 1990s, attracted by the country’s oil fields. Of the $150 billion in foreign investment in the Central Asian country since independence, $120 billion – or more than 70 percent-  has been in natural resources extraction.

And while the vast country, with its relatively small population, attracts about 60 percent of all capital invested in the five former Soviet Central Asian states, COVID-19 has taken its toll, with FDI forecast to decline by 5-10 percent in 2021, before recovering in 2022.

Nogayev said that work was underway to reorient the oil and gas sector from raw materials to products with high added value,  such as the development of a high value-added oil and gas chemical industry.

This is expected to increase the production volume of petrochemicals fivefold by 2025 from 2020, to 2 million tonnes. Exports of  petrochemical products will be multiplied by eight in the same period to $1.336 billion, about 80 percent of the country’s total revenue.

By 2025, Kazakhstan plans to complete the construction of five factories, costing $4.7 billion, and begin the construction of seven factories, at a total cost of $12.7 billion.

Though Kazakhstan has advertised itself abroad as a country where the property rights of investors will be protected, concerns have been raised.

Foreign investors have on occasion registered complaints about the arbitrary application of laws, with some claiming they are designed to demand bribes. Enforcement has also sometimes been labelled opaque. Other investors have complained about alleged tax harassment, including snap audits and inspections, or about threats of criminal charges being made to resolve civil disputes.