Kazakh energy giant pushes talks with Lukoil, warns of no easy solutions

Kazakhstan’s national company KazMunayGas is holding negotiations with Lukoil over the Russian firm’s assets in the republic, with officials warning that “there will be no simple solutions.”

Nurlan Zhakupov, chairman of the Samruk-Kazyna sovereign wealth fund, the main shareholder of KazMunayGas, told reporters that no concrete agreements can yet be announced, as consultants for both Lukoil and KazMunayGas are currently working on the matter, Caliber.Az reports, citing TASS.

“Lukoil is a partner of KazMunayGas in many projects, which creates both a need and a necessity for this work,” he said.

Zhakupov added that “there is a deadline set by the US authorities.” 

He noted that “time still remains, but the issue is very complex and multifaceted, and there will be no easy solutions.”

Kazakh Energy Minister Yerlan Akkenzhenov, meanwhile, clarified that the government itself is not negotiating the purchase of Lukoil’s assets, stressing that only commercially operating entities may do so.

He noted that the deadline for Lukoil’s asset-related decisions has been postponed until mid-December and added that major joint projects with the company have been exempted from sanctions and face no operational threats.

Lukoil entered Kazakhstan in 1995 and has since invested over US$12 billion in the country’s oil and gas sector, producing about 94 million tons of oil and 60 billion m³ of gas in partnership with KazMunayGas.

In September 2019, Lukoil and KazMunayGas signed an agreement for joint studies to evaluate hydrocarbon potential in certain Kazakhstan areas; among their ongoing partnerships are the fields of Karachaganak, Tengiz, Kumkol and the Caspian Pipeline Consortium.

Despite recent sanctions imposed on Lukoil by US authorities, KazMunayGas has confirmed that their joint projects continue and that a detailed assessment of legal, financial and technical implications is underway. 

By Jeyhun Aghazada