Foreign energy giants face pressure to boost local spending in Kazakhstan

Chevron, Eni, Shell and other global oil majors are being pushed to increase their reliance on local suppliers as Kazakhstan moves to strengthen domestic economic participation in its multibillion-dollar energy projects.

Kazakhstan’s Prime Minister Olzhas Bektenov has called on operators of the country’s three largest oil and gas fields — Tengiz, Kashagan and Karachaganak — to raise the share of goods, services and labor sourced from Kazakh companies. Currently, only 23% of their procurement comes from local suppliers, leaving the majority dependent on imports.

«This sector still holds enormous potential,» Bektenov emphasized at a recent government meeting. «I raise this issue every time I meet with them. It’s essential they work with Kazakh enterprises and boost domestic value — and this process must be closely monitored and fulfilled,» he told Energy Minister Yerlan Akkenzhenov.

The push for localization directly affects global players like Chevron (Tengizchevroil, TCO), Eni, Shell, Lukoil (Karachaganak Petroleum Operating B.V., KPO), CNPC, ExxonMobil, Total Energies and Inpex (North Caspian Operating Company N.V., NCOC), which together account for 62% of procurement across the sector.

According to Akkenzhenov, in the first quarter of 2025, Kazakhstan’s energy sector spent over $2.1 billion on goods, works and services, with domestic content reaching 60.2%. Yet this marks a slight decline from 61.9% in 2024, when total annual procurement by the sector hit $11.9 billion.

Authorities are now ramping up pressure. In 2024 alone, 58 contracts worth $828.9 million were signed between foreign operators and Kazakh suppliers. Since the start of 2025, another eight contracts, totaling $24.4 million, have already been inked.

To enforce these changes, Kazakhstan has revised tender procedures for the Kashagan and Tengiz projects, favoring local manufacturers through mechanisms like single-source procurement, local-only tenders, conditional discounts and long-term investment contracts. Similar reforms for Karachaganak are expected soon.

For KPO, the domestic share of goods is set to rise from 18% in 2025 to 30% by 2029, while for NCOC, it is projected to climb from 17% to 28% over the same period. These programs also include gradual increases in local content for works and services.

Even Chevron’s flagship Tengizchevroil has seen slight drops in local content: in 2024, Kazakh suppliers provided 69% of its total spending, down from 70% the year prior. Of the $4.2 billion in total costs, only 7% of goods were locally sourced, compared to 80% for works and 78% for services.

Kazakhstan’s Vice Minister of Energy Arymbek Kudaibergen has underlined that raising local content in the oil and gas sector remains a national priority — a move that puts foreign operators under increasing scrutiny as the country works to ensure its vast energy wealth directly benefits the domestic economy.