KazMunayGas (KMG), the national oil company in Kazakhstan, has suspended work on the Kalamkas-Sea and Khazar fields in the Caspian Sea, which it has been developing in conjunction with Russia’s Lukoil, a company targeted by Western sanctions, Interfax reported.
The news was officially confirmed by KMG CEO Askhat Khasenov.
«We completed the design stage of the Kalamkas-Sea and Khazar joint project last year. However, due to a new factor — sanctions — the further implementation of the project has been suspended,» he said.
Both fields, with estimated reserves of 8.5 million tons of oil and 19 billion cubic meters of gas, are located in the Kazakh sector of the Caspian Sea. KMG had expected production to reach about 4 million tons per year (80,000 barrels per day) over a five-year period. First oil was planned for the end of 2029.
The project is equally owned by KMG (50%) and Lukoil (50%), with total investment expected to reach $6.4 billion.
According to Askar Ismailov, an industry expert and director of the analytical company RACE Analytics, the project’s suspension could significantly impact oil production in West Kazakhstan. He estimates that output in the region may decline from 17 million tons currently to 12 million tons by 2030. Moreover, if the Beineu district in the Mangystau region is transferred to the Atyrau region, output could decline even further.
Meanwhile, in February, the U.S. extended the deadline for the sale of Lukoil’s foreign assets until April 1.
Sanctions and extension history
The U.S. imposed sanctions on Lukoil, Rosneft and several of their subsidiaries on Oct. 22, 2025. Initially, all transactions involving these companies were required to be completed by Nov. 21.
The U.S. Office of Foreign Assets Control (OFAC) later issued a special license allowing transactions related to the sale of Lukoil’s foreign assets until Dec. 13. Since then, the license has been extended three times.
On Jan. 29, Lukoil and the American Carlyle Group announced a preliminary agreement to sell Lukoil International GmbH. The deal has yet to be approved by OFAC.
Portfolio and potential buyers
Lukoil’s international portfolio, which includes oil fields, refineries and several gas station networks from Iraq to Finland, is estimated at $22 billion.
More than a dozen bidders have expressed interest in the assets, including ExxonMobil, Saudi Arabia’s Midad Energy, UAE-based investment groups, and a consortium involving Chevron and Quantum Capital Group.
In addition to OFAC, senior officials from the White House, the Treasury Department, and the U.S. State Department are involved in the process. U.S. Treasury Secretary Scott Bessent, for example, is among the most active participants in the negotiations.
What about the Kazakh assets?
Lukoil, together with KMG, owns a 50% stake in the Kalamkas-Sea and Khazar project. In addition, the Russian company holds shares in Karachaganak Petroleum Operating B.V., the operator of the Karachaganak field, as well as a 5% stake in Tengizchevroil and 12.5% in the Caspian Pipeline Consortium.
