Kazakhstan Boosts Local Content in Oil and Gas with New Procurement Rules

During the XIII annual "KAZNEFTEGASSERVICE-2026" conference on April 3, Vice Minister of Energy Yerlan Akbarov outlined a comprehensive strategy to strengthen Kazakhstan's domestic oil and gas sector. He emphasized that developing national construction and engineering capabilities is crucial for the industry's sustainable growth.

The Ministry of Energy is collaborating with major project operators—NCOC, KPO, and TCO—on systematic efforts to enhance in-country value and increase the participation of Kazakhstani manufacturers in procurement. This has led to significant revisions in tender procedures for the North Caspian, Karachaganak, and Tengiz projects.

The new rules introduce several incentive mechanisms. These include allowing purchases from a sole domestic supplier, conducting limited tenders exclusively for local companies, and offering long-term contracts in exchange for investments from Kazakhstani businesses.

Furthermore, approved local content development programs mandate an annual increase in the share of in-country value for goods, works, and services. Modern support tools for domestic producers have also been implemented. To ensure transparency, operators have rolled out an E-procurement system that makes every stage of the tender process—from application to contract signing—visible to all participants.

The Ministry is actively working to keep businesses informed by regularly organizing forums, seminars, and B2B meetings with project operators. These events showcase the equipment needs and procurement plans of major oil and gas developments. A key focus is on securing long-term and offtake contracts for local suppliers.

Efforts extend beyond the largest projects. In 2025, amendments were made to approximately 75 subsoil use contracts with other resource developers. These changes raised the required share of in-country value to 40% for goods and 80% for works and services. New contracts for complex projects now include mandatory obligations to develop programs for supporting local suppliers.

These achievements lay a solid foundation for advancing Kazakhstan's domestic engineering sector. Future priorities include strengthening national engineering competencies, localizing engineering services, and expanding the role of Kazakh companies in executing major oil and gas projects.