JSC National Company KazMunayGas (KMG) has suspended a joint project with PJSC Lukoil to develop the Kalamkas-Sea and Khazar fields in the Caspian Sea due to sanctions imposed against the Russian company. The project, with investments of around $6.4 billion and planned production of up to 4 million tonnes of oil per year, was at the stage of preparation for a final investment decision.
WHAT IS KNOWN ABOUT THE PROJECT
According to Interfax, KMG Board Chairman Askhat Khassenov stated that the company completed the design phase in 2024, but further implementation has been halted due to the imposed sanctions. The project involved the joint development of the Kalamkas-Sea – Khazar – Auezov fields. The participants were KMG (50%) and Lukoil (50%).
The fields are located in the Kazakh sector of the Caspian Sea. The depth of the productive horizons is around 1.5–2 thousand metres below the seabed.
Total recoverable reserves are estimated at 48.5 million tonnes of oil and 19 billion cubic metres of gas. The planned production level is around 4 million tonnes of oil per year (approximately 80 thousand barrels per day), with a production duration of at least five years.
First oil was expected by the end of 2029, and total investment was preliminarily estimated at $6.4 billion. The final investment decision was planned for 2025.
WHY THE PROJECT HAS BEEN SUSPENDED
As Askhat Khassenov stated, the key factor was the sanctions imposed against Lukoil.
The US Department of the Treasury imposed restrictions on 15 October 2025, simultaneously issuing a licence to wind down operations.
WHICH PROJECTS ARE NOT AFFECTED BY THE SANCTIONS
However, a number of international projects involving Lukoil in Kazakhstan received temporary exemptions from the sanctions regime until 14 October 2027.
These include:
- The Caspian Pipeline Consortium (CPC), where the company's share is 12.5%;
- The Tengiz project (5% in the operator Tengizchevroil LLP);
- Karachaganak, where the share in the operator is 13.5%.
The project for the Kalamkas-Sea and Khazar fields was not included in this list.
WHAT THIS MEANS
At present, the project's implementation has been halted, and the timelines for starting production and making an investment decision remain uncertain. The materials do not clarify whether alternative options for continuing the project are being considered.