Kazakhstan is monitoring the potential disposal of sanctioned Russian oil producer Lukoil's assets in the country and has asserted its pre-emptive right to acquire them. Authorities have not yet opened talks with Lukoil but are waiting for deadlines set for the company to sell its international assets to expire before deciding whether to exercise this right.

Lukoil's Key Assets and Sanctions Context

Lukoil holds significant stakes in major Kazakh energy projects. It is a minority shareholder in the Tengiz and Karachaganak oil fields and the Caspian Pipeline Consortium. It is also the operator and 50% shareholder in the offshore Kalamkas-Khazar development. The US imposed sanctions on Lukoil in October, with a deadline for compliance extended to January 17. While the US granted exemptions allowing Lukoil to continue operations at Tengiz, Karachaganak, and the Caspian Pipeline Consortium, sanctions still hinder its activities at Karachaganak by restricting US dollar payments through banks.

Status of the Kalamkas-Khazar Project

The Kalamkas-Khazar project, a 50:50 joint venture with Kazakh state firm KazMunayGaz, is the only Lukoil-related asset in Kazakhstan not exempted from US sanctions. Despite the sanctions impacting the project, which was nearing a final investment decision, Kazakh authorities have not insisted Lukoil exit. Industry sources suggest there are few potential contenders to replace Lukoil, given its specific experience in developing similar mid-sized Caspian Sea fields. Contractors report that Lukoil remains engaged with them on the project's development.

Potential Future Involvement of Other Companies

Kazakhstan has considered involving US majors Chevron and ExxonMobil, or Chinese state oil companies, in the Kalamkas-Khazar project. One contractor suggested Chinese involvement might be driven more by political rapprochement between Astana and Beijing than commercial reasons. Chevron, when approached for comment, stated it complies with applicable laws but does not comment on commercial matters.