Kazakhstan Oilfield Service
Parliamentary Audit of Oil and Gas Procurement
Kazakhstan's Parliament has turned its attention to Kazakhstani content in the procurement of oil and gas companies. Since last year, the Mazhilis Committee on Ecology and Natural Resource Use has begun summoning senior executives of major operators to report. The parliamentary chamber has become not just a venue for discussion but, in practice, a site for auditing the effectiveness of the country's industrial policy in the oil and gas sector.
Last year, the first to face this public review were the heads of the three largest projects, Tengiz, Kashagan, and Karachaganak, which together account for the core volume of industry procurement. The operators' combined annual spending is measured in trillions of tenge. With large-scale investment programs underway, including the recently completed Tengiz expansion, the potential for domestic demand for equipment and services remains immense.
However, the parliamentary hearings showed that a formal increase in localization metrics has not yet translated into a structural industrial breakthrough.
“Based on the results of 2025, the total volume of procurement of goods, works, and services by companies operating in Kazakhstan with Chinese participation amounted to 231 bln tenge. Of this amount, 173 bln tenge accounted for in-country value, including 113.6 bln tenge for CNPC-Aktobemunaigas JSC, 40.6 bln tenge for Buzachi Operating LTD, 9.6 bln tenge for KoZhaN JSC, and 8.9 bln tenge for Maten Petroleum JSC.”
Erlan Akbarov, Vice Minister of Energy, at a session of the Mazhilis Committee on Ecology and Natural Resource Use, February 12, 2026.
Imbalance: Services Instead of Industry
According to official reporting, the in-country value in the oil and gas sector fluctuates between 60 and 65%. On certain projects, indicators for works and services reach 90-95%.
However, the goods component remains chronically low, in some cases only 7 to 18%. This means that critical process equipment, compressors, metering systems, pumping units, and high-pressure pipeline valves are being imported almost entirely. Headline figures are being driven by Kazakhstani content in works and services.
Economically, this creates several risks:
- High import dependence, currency fluctuations directly affect project CAPEX.
- Repatriation of value added, a significant share of investment spending is not capitalized inside the country and instead flows abroad.
- Technological stagnation and a lack of demand for local machine-building constrain the development of engineering competencies.
Members of Parliament rightly noted that the current localization methodology blurs the real picture. A high share of services creates an illusion of industrial progress, while the industrial base remains weak.