On January 27 of this year, the 27th regular meeting of the KAZENERGY Association Council was held online, to discuss the results of work in 2020 and plans for the current year. The annual reporting event of KAZENERGY was attended by Minister of Energy of the Republic of Kazakhstan Nurlan Nogayev, Minister of Ecology, Geology and Natural Resources of the RoK Magzum Mirzagaliyev, Parliament deputies, representatives of major international oil and gas companies, and members of the Association.
In his opening speech, Chairman of the KAZENERGY Association Timur Kulibayev noted that the coronavirus pandemic, reduced demand for energy resources, price volatility, and limitation of production capacity are only a few issues that all the oil and gas producing countries, global power producing companies and the expert community have faced to address.
The Government of Kazakhstan has adopted and keeps considering a bailout and stimulus package which optimally meets the needs of the national economy and the social sector.
The KAZENERGY Association, being the largest dialogue platform between the Government of Kazakhstan, the Parliament, and companies operating in the oil and gas and energy sectors, has been actively involved in this work.
When addressing the meeting participants, Minister of Energy Nurlan Nogayev noted that in 2020, the oil and gas sector experienced a catastrophic reduction in demand for oil due to the imposed quarantine in most countries, which led to an oversupply over the global demand. Therefore, the OPEC+ member countries ventured to take unprecedented steps to reduce oil production by 23%. These steps had their positive effect, gradually equalizing the balance of supply and demand in the market, with the price per barrel rising from $18 to $55.
The Minister highly appreciated the joint work with the KAZENERGY Association, noting, in particular, that, due to the comprehensive dialogue on the platform of the Association, a series of measures aimed at supporting and stimulating companies in the energy sector, both in terms of administrative procedures and fiscal regime, have been taken.
Magzum Mirzagaliyev, Minister of Ecology of Kazakhstan, said that the new Environmental Code enacted last year promotes the adoption of preventive measures to avoid negative impacts on the environment. This year, the development of the 7 most accessible technologies for large enterprises in the electric power industry, mining industry, metallurgy, oil refining, chemistry, cement is planned. The work on the comprehensive process audit of 97 national enterprises, including 23 in the energy sector and 21 in the oil and gas sector, is ongoing.
Chairman of the Board of NC “KazMunayGas” JSC Alik Aidarbayev highlighted in his report several issues that require close cooperation between government authorities and key players of the industry, including: the development of the petrochemical sector, new terms for offshore projects and related issues concerning the improvement of tax legislation.
Mr. Olivier Lazare, Chairman of Shell Kazakhstan, also addressed the meeting where he stressed that the oil and gas industry needs to be supported as one of the key sectors of the economy, for at least the next few decades. According to him, the energy sector requires further improvement of fiscal conditions, reduction of the cost of projects in Kazakhstan, provision of an opportunity for the development of gas resources and simplification of administrative procedures. Doing so would prevent a significant reduction in investment in the oil and gas industry in Kazakhstan.
