Kazakhstan eyes alternative tax for investors developing old fields

The Government of Kazakhstan is planning amendments to the Tax Code to apply an alternative tax to subsoil users developing depleting deposits, Report informs, citing the Energy Ministry of Kazakhstan.

“This year, amendments to the Tax Code are expected to apply an alternative tax on subsoil users to 24 out of 307 oil fields,” the ministry noted.

According to the Ministry of Energy, the full implementation of this reform will give impetus to investment in geological exploration of up to 200 billion tenge [$453 million] annually, increase oil production by 60 million tons by 2045 and preserve current jobs.

The ministry also reported that due to the introduction in 2023 of the “Improved Model Contract for Complex Projects” mechanism, which provides for a significant package of regulatory and fiscal preferences, Kazakhstan has concluded five contracts totaling about $9 billion.

According to the Ministry of Energy, in 2023, 30 hydrocarbon fields moved from the exploration stage to the production stage. The increase in recoverable reserves in such fields for oil amounted to 115.4 million tons, gas – 25.5 billion cubic meters.