KIOGE-2026
The Era of «Easy Oil» is Over: How Kazakhstan❜s Oil and Gas Industry is Changing
While analysts are revising forecasts for global oil prices amid global instability, the oil and gas industry itself is changing. Until recently, large hydrocarbon reserves were considered the main advantage. Today, modern oil and gas projects compete through technology, digital solutions, industrial safety, artificial intelligence, and the efficiency of every dollar invested. We look at how these trends are reflected in one of Kazakhstan’s largest industrial projects, the Tengiz field.
HOW SPECIALISTS WERE FORGED AT TENGIZ
Over the past three decades, Tengiz has gone from being one of the most challenging fields in the world to becoming a high-tech production complex, where large-scale investment projects are implemented and specialists are trained who now work not only in Kazakhstan, but also beyond its borders.
At the same time, the complexity of the field itself has not disappeared. On the contrary, it has largely shaped the approaches that are now considered industry standards.
Even decades after the start of development, specialists still consider Tengiz one of the most challenging and complex fields in the world across a number of parameters:
- Extremely high reservoir pressure remains a defining feature here. Oil and gas are found deep underground, while reservoir temperatures exceed 100°C, meaning that production requires sophistcated engineering solutions and strict compliance with industrial safety requirements.
- Another distinctive feature is the high content of hydrogen sulfide, reaching up to 13 percent. This is one of the most toxic, highly aggressive, and corrosive components of natural gas, so development of the field requires special technologies, equipment, and multilayered control systems.
- The picture is further complicated by extreme climatic conditions: in summer, temperatures in the Atyrau region exceed +40°C, while in winter they can drop to -40°C.
In terms of engineering complexity, Tengiz is often compared to deepwater fields in the U.S. Gulf of Mexico, West Africa, and Brazil, where oil is produced through kilometers of water, rock, and salt formations.
In the early 1990s, negotiations began with potential international partners on the joint development of the Tengiz field. As a result, in 1993, Kazakhstan signed an agreement with Chevron Corporation to establish the Tengizchevroil joint venture, bringing together international experience and Kazakhstan’s potential to develop one of the most challenging oil projects in the world.
Thus, at a time when the entire post-Soviet space was going through an economic crisis, Kazakhstani specialists were actively involved in the project. Over time, their role grew significantly: while at the initial stage Kazakhstani citizens held about half of leadership positions, today their share has reached 96 percent.
This view is shared by Nurlan Zhumagulov, Director of the Energy Monitor Public Foundation. He notes that specialists who have gone through the Tengiz school are in demand not only in Kazakhstan.
«Tengiz has trained specialists who are highly valued in the international market,» he says.
According to him, the value of this experience is linked to the specific nature of the field itself: Tengiz specialists are capable of working on almost any major oil and gas project in the world and are in high demand. Over time, he says, the field has become a kind of engineering school for Kazakhstan’s entire oil and gas industry.
The technologies, safety standards, and management practices accumulated here have also proved valuable in the implementation of other major projects, including Karachaganak and Kashagan. Incidentally, Chevron is also involved in the development of Karachaganak. And while Tengiz is considered one of the most challenging oil fields in the world, Karachaganak is regarded as one of the most complex gas condensate fields.
FROM ENGINEER TO CAPITAL PROJECTS MANAGER
Engineer Utebay Dyussenov joined TCO in 1997, when he was 35. He applied for the vacancy after seeing an advertisement in a regional newspaper and successfully passed an open selection process.
Later came new appointments, training courses, work on various projects, and even practical training in South Korea. Eventually, Dyussenov grew into a major projects manager. He also witnessed the growth of other highly skilled specialists and even companies. For example, in 2005, a decision was made to entrust the construction of a tank farm to Kazakhstani companies. Engineers learned new technologies together, set up production, and looked for technical solutions directly during the course of the work.
«After completing its first major oil tank project according to Tengiz standards, this Kazakhstani contractor went on to build tanks at other fields, and now this area has become one of its core business lines,» he recalls.
Oleg Chervinsky
««Over more than three decades of Tengiz operations, several generations of highly qualified Kazakhstani engineers, technologists, designers, and managers have emerged. This is perhaps one of the most significant longterm results of the project,» says Oleg Chervinsky, Oil and Gas Industry Expert».
Utebay Dyussenov
«Even though we were ordinary engineers, the project manager began taking my shift partner and me to shareholder meetings and meetings with the board of directors. We were not just doing our work, we saw how and why decisions were made,» says Utebay Dyussenov, Engineer
Nurlan Zhumagulov
«Tengiz has trained specialists who are highly valued in the inter national market,» says Nurlan Zhumagulov, Director of the Energy Monitor Public Foundation
HOW TENGIZ BECAME THE SITE OF KAZAKHSTAN’S LARGEST INDUSTRIAL PROJECT
Speaking about human capital, experts point not only to the training of engineers, but also to the formation in Kazakhstan of a culture of implementing major world-class industrial projects. Above all, a culture of industrial safety. «I remember my first visit to Tengiz in the late 1990s, which began with a safety briefing and instructions on the rules for staying at the field. ‘Safety above all!’ has been the main operating principle at Tengiz from the very first day Chevron arrived,» Chervinsky recalls.
According to him, one of the company’s key legacies in Kazakhstan has been the introduction of modern approaches to managing large-scale industrial projects.
As an example, Chervinsky cites the Future Growth Project, or FGP, whose implementation began at Tengiz in 2016 and which was brought into operation in 2025. This was a major stage in the development of the field since the establishment of Tengizchevroil and one of the largest oil and gas projects in the world in recent years. As part of the project, a third-generation plant was built at the field, along with new facilities for injecting gas back into the reservoir, additional production wells, and other production infrastructure. In addition, the Wellhead Pressure Management Project was implemented, allowing efficient production to be maintained as reservoir pressure naturally declines.
The launch of the facilities and their ramp-up to design capacity made it possible to increase production by approximately 12 million tonnes of oil per year.
«Managing thousands of contractors, complex logistics, international supply chains, and compliance with unified technical standards are competencies that are built over decades, become an important intellectual asset for the company, and remain in Kazakhstan,» says Chervinsky.
TECHNOLOGY INSTEAD OF THE RACE FOR VOLUMES. HOW IS THE OIL AND GAS INDUSTRY CHANGING?
Experts agree that today the oil and gas industry is undergoing a qualitative transformation.
If production volumes were once considered the main indicator of development in the oil industry, technological capability is now becoming the key factor.
«Tengiz’s competitiveness over the next 20 to 30 years will depend on its ability to continuously improve efficiency and adapt to new conditions,» Chervinsky continues.
The expert explains that virtually all major oil and gas projects are being reconfigured with artificial intelligence, digital technologies, automation of production processes, and big data analytics in mind. These tools make it possible to improve production efficiency, reduce operational risks, and lessen environmental impact.
In fact, all these new approaches are also being used at Tengiz. «One may own a major field, but if its development is too expensive, or if the hydrocarbons produced do not have reliable routes to global markets, the investment attractiveness of such a project declines. The model based solely on extensive production growth is also gradually ceasing to work. Today, it is far more important to improve the efficiency of every dollar invested than simply to increase production volumes,» Chervinsky adds.
WHAT THE LARGEST OIL AND GAS PROJECTS GIVE THE COUNTRY
At the same time, the contribution of the largest oil and gas projects to Kazakhstan’s economy is measured not only by production volumes, but also by tax revenues, export earnings, and orders for domestic businesses.
According to oil and gas analyst Abzal Narymbetov, Tengiz, Kashagan, and Karachaganak remain the foundation of Kazakhstan’s oil and gas industry.
He cites Energy Analytics data: in 2025, Kazakhstan produced a record 99 million tonnes of oil. Tengiz accounted for about 39 million tonnes, Kashagan for 18 million, Karachaganak for 12 million, while the country’s other fields provided another approximately 30 million tonnes.
Thus, together, the «Big Three» – Tengiz, Kashagan, and Karachaganak – produced about 69 million tonnes.
At the same time, Tengiz became the main source of production growth following completion of the Future Growth Project. In 2025, production at the field reached 39 million tonnes of oil, increasing by approximately 12 million tonnes after the launch of new production capacity.
As a result, Kazakhstan’s total oil production increased from 88 million to 99 million tonnes over the year.
The role of these projects is also visible in the volume of tax revenues. In 2025, Tengizchevroil paid around 3.6 trillion tenge to the budget, Karachaganak operator KPO paid 1.3 trillion tenge, and Kashagan operator NCOC paid 527 billion tenge. Together, these three companies contributed around 5.4 trillion tenge, or almost 79 percent of all tax revenues from oil and gas companies.
«It turns out that Kazakhstan’s economy depends to a large extent on three major projects in two ways at once: they provide about twothirds of all oil production and the main share of tax revenues from the oil and gas industry. Therefore, a shutdown at one field, a decline in production, or problems with export routes could have a noticeable impact on production volumes, budget revenues, and the country’s economic growth rates,» Narymbetov explains.
In addition, experts note that large international companies create an entire production ecosystem around themselves by purchasing goods and services from Kazakhstani enterprises, developing local suppliers, and creating demand for new competencies.
«Oil and gas companies purchase goods, works, and services worth around 10 billion dollars every year, and about half of this amount remains in Kazakhstan’s economy. These funds go toward developing domestic business, training specialists, and implementing social projects in producing regions,» says Nurlan Zhumagulov, Director of the Energy Monitor Public Foundation.
Oleg Chervinsky also draws attention to the broader economic effect.
«Export earnings, the inflow of foreign currency into the country, the utilization of transport infrastructure, and the formation of revenues for the National Fund and the state budget create the financial foundation for implementing social programs and developing Kazakhstan’s infrastructure,» the expert notes.
WHY THIS EXPERIENCE GOES BEYOND THE OIL INDUSTRY
Over more than three decades of work in Kazakhstan, experts say, Chevron has become one of the longest-standing and largest-scale examples of cooperation between the country and an international investor. The company has, in effect, gone through almost the entire modern history of independent Kazakhstan together with the country. According to Oleg Chervinsky, the successful implementation of such major projects has contributed to the formation of the country’s investment reputation and helped Kazakhstan establish itself as a reliable partner for international business.
«And this investment reputation is an asset that extends beyond the oil and gas industry,» the expert clarifies.
Narymbetov shares this assessment. According to him, cooperation was not limited simply to the launch of the Tengiz field: the partners continued investing in production expansion, technology modernization, the development of local suppliers, and the country’s social projects. During this period, according to TCO, cumulative direct financial payments to Kazakhstan reached 212 billion dollars, while another 52.3 billion dollars was spent on purchasing goods and services from Kazakhstani companies. In 2025 alone, the company made 10.6 billion dollars in direct financial payments to Kazakhstan, while the share of Kazakhstani content in expenditures reached 71 percent.
«Cooperation continued through new stages of development, production expansion, technology modernization, and the gradual growth of the role of Kazakhstani specialists and suppliers. At the same time, partnership does not mean the absence of disagreements. In projects of this scale, questions inevitably arise regarding costs, the environment, taxes, and the distribution of revenues. The main indicator of the maturity of relations is the ability to resolve these issues within the legal framework, without undermining the project itself,» adds Abzal Narymbetov, Oil and Gas Analyst .
The story of Tengiz, experts note, is essentially the story of Kazakhstan’s oil and gas industry in miniature: from a field that in the early 1990s was considered too complex and risky to develop, to a project that sets industry standards and trains world-class specialists. For an industry entering an era of technological competition, this may prove to be an asset no less valuable than the fields themselves.
Photo courtesy of Chevron’s press service