KazMunayGas Karachaganak, a wholly owned subsidiary of Kazakhstan’s national oil and gas company KazMunayGas (KMG), plans to reduce capital expenditures on the Karachaganak project by nearly threefold in 2027, to 10.9 billion tenge (about $23 million) from 29.96 billion tenge. The plans are outlined in the company’s financial statements.
The expenditures are related to KazMunayGas’ participation in development of the Karachaganak field under the Final Production Sharing Agreement (FPSA). The national oil and gas company holds a 10% stake in the field operator, Karachaganak Petroleum Operating B.V. (KPO), and therefore funds a corresponding share of the project’s capital expenditures.
Capital expenditures are expected to continue declining in subsequent years, falling to 8.2 billion tenge in 2028 and 5.6 billion tenge in 2029. During 2030-2037, when the FPSA is scheduled to expire, total capital expenditures are projected at 17.5 billion tenge. (The agreement was signed in 1997 for a 40-year term.)
Operating expenses also set to decline
Operating expenses at KMG Engineering for the project are also expected to decrease, falling to 1.08 billion tenge in 2027 from 4.7 billion tenge in 2026. They are projected to remain at 1.08 billion tenge annually in 2028 and 2029, while totaling 7.6 billion tenge over the 2030-2037 period.
Authorized capital reduced
On Oct. 8, 2025, KMG’s board of directors approved a 30 billion tenge reduction in the authorized capital of KMG Karachaganak. On Nov. 27, 2025, KMG received the full 30 billion tenge from its subsidiary. By the end of 2025, KMG Karachaganak’s authorized capital had declined to 135.3 billion tenge.
Revenue and profit
KMG Karachaganak reported revenue of 184.2 billion tenge in 2025, compared with 185.9 billion tenge in 2024. Most of the revenue came from crude oil sales, which generated 179.5 billion tenge, down from 181.1 billion tenge a year earlier. Sales of gas and gas products contributed 4.7 billion tenge, compared with 4.8 billion tenge in 2024.
All crude oil was delivered to Switzerland, although the purchasing companies may simply be registered there, while gas was supplied to Kazakhstan. The buyers were BG Karachaganak Trading Ltd., ENI Trading B.V., Litasco S.A., Chevron Products Co., and KazMunayGas Trading AG.
Crude oil is exported through the Caspian Pipeline Consortium (CPC) system and the Atyrau-Samara pipeline. Revenue from sales of crude oil, gas and condensate is recognized upon delivery to the buyer. Payment is typically received within 30 days of delivery.
KMG Karachaganak posted net profit of 15.3 billion tenge in 2025, down sharply from 159.1 billion tenge in 2024. As of the end of 2025, the company had an accumulated deficit of 28.1 billion tenge.
Karachaganak project
The Karachaganak field, discovered in 1979, is one of the world’s largest gas-condensate fields. Under the FPSA, KPO is developing the field through the end of 2037. Since the agreement was signed, more than $29.8 billion has been invested in the project.
The current ownership structure of KPO is as follows: Eni S.p.A. (29.25%), Shell Plc (29.25%), Chevron (18%), Lukoil (13.5%) and KazMunayGas (10%).
