Expertise
How Foreign Investments Are Transforming Kazakhstan❜s Economy and Everyday Life
Foreign investments are pivotal in the country's economic development, particularly in strategically significant sectors such as oil and gas. Kazakhstan, possessing some of the world’s largest oil and gas reserves, actively attracts international capital to develop its natural resources. In addition to offering immense growth potential for the national economy, these investments directly impact the lives of ordinary Kazakhstani citizens.
In nearly 30 years of its modern history, Kazakhstan has attracted $441 bln in foreign direct investments. Leading contributors include countries such as the Netherlands, the United States, Switzerland, China, and Russia. Statistics reveal that the most attractive sectors for foreign capital are mining and quarrying, manufacturing, wholesale and retail trade, transportation, and warehousing.
“Foreign investors have brought capital, advanced technologies, and highly skilled labour. Their investments have driven the growth of our energy sector: over the past 30 years, oil production has tripled. Thanks to this, Kazakhstan has joined the top five countries with the fastest growth in oil production. Looking to the future, we aim to surpass the threshold of 100 mln tons annually,” stated Kazakhstan’s President Kassym-Jomart Tokayev at the end of October.
In the annual FDI Standouts Watchlist study, Kazakhstan ranked 6th in macroeconomic development and foreign direct investment attraction for 2023. Authorities have repeatedly emphasized that the country faces an ambitious goal: to attract an additional $150 bln in foreign direct investments by 2029.
Resources and Technology
With the attainment of independence, Kazakhstan faced the necessity of conducting an independent financial and economic policy, in other words—generating revenue. This was impossible without developing its vast natural resources and advancing infrastructure. The country urgently needed to attract foreign capital, expertise, and technology to tackle these challenges.
In 1991, the country's leadership adopted the "Foreign Investments Law," marking a significant milestone in Kazakhstan’s modern history. The law protected investors' rights and outlined support measures. One of the world’s leading integrated energy companies Chevron was Kazakhstan's first major partner and pioneer.
The company was drawn to a new market with high potential, while the country sought foreign investments to efficiently develop its natural resources and nurture its emerging economy.
Following Chevron's entry, other major international oil and gas companies quickly followed: ExxonMobil, Shell, Total, Lukoil, and Eni. They participated in various projects related to the development of oil and gas fields, such as Tengiz, Karachaganak, and Kashagan. These companies brought modern technologies and financial resources, created jobs, and significantly contributed to the modernization of the oil and gas sector.
Thousands of Jobs
Chevron is the largest foreign investor, playing a pivotal role in Kazakhstan’s economy through its participation in the Tengizchevroil (TCO) joint venture (20% of which is owned by the national company KazMunayGas). TCO develops Tengiz, one of the country’s largest oil fields. Last year alone, TCO’s direct contributions to Kazakhstan’s economy amounted to $11 bln. Since the start of its operations in 1993, this figure has reached $201 bln.
Chevron invests billions of dollars in the development of Tengiz, continuously increasing oil production, enhancing infrastructure, and introducing advanced technologies. The enterprise accounts for about a quarter of Kazakhstan’s total oil output. TCO has become the largest taxpayer, contributing 3.7 trln tenge to the state budget in 2023 alone. The Tengiz field generates up to 22% of the country’s total tax revenue.