A practical guide to licensing and permit requirements in Kazakhstan in the oil and gas sector

Unlike many civil-law jurisdictions where a single upstream concession framework governs foreign participation in the hydrocarbons sector, Kazakhstan operates a multi-instrument licensing regime that combines subsoil use contracts, exploration and production licences, and project-specific environmental and technical permits — each administered by a different governmental authority. For foreign companies and their counsel assessing entry into Kazakhstan's oil and gas sector, the practical challenge is not identifying the headline licence category but navigating the sequencing, the local-content obligations, and the approval bodies that sit between initial application and the right to commence operations. This guide sets out the principal steps, the documents required at each stage, and the risks that most commonly delay or obstruct foreign-company licensing in Kazakhstan.

The most common cause of avoidable delay in Kazakhstan licensing is filing before the preparatory checklist has been completed. Applications returned for incompleteness reset the queue position in certain regulatory streams, and competing applicants for the same block are not paused in the interim.

Before any formal application reaches the Ministry of Energy or the competent territorial authority, the following should be confirmed:

• Legal entity status in Kazakhstan: a foreign company must be established or registered in Kazakhstan — whether as a local legal entity, a branch of a foreign company, or a vehicle under the Astana International Financial Centre (AIFC) framework — before it can hold a subsoil use contract in its own name.
• Financial capacity documentation: the Ministry of Energy requires evidence of financial capacity to undertake the work programme specified in the application. For exploration licences, this typically encompasses proof of minimum capitalisation thresholds and a confirmed work programme budget.
• Technical capability confirmation: the applicant must demonstrate the technical capacity to execute the proposed exploration or production programme, either through its own specialists or through a contracted operator agreement with a qualified entity.
• No disqualification status: the applying company and its principals must not appear on Kazakhstan's register of entities disqualified from subsoil use activities. Foreign parent entities may be subject to the same check.
• EAEU trade and import compliance: companies intending to bring equipment and materials into Kazakhstan under a subsoil use contract should confirm customs classification and EAEU import duty positions before committing to capital expenditure.

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Kazakhstan's subsoil use framework does not use a single licence form. The type of subsoil use contract determines the regulatory pathway, the approval authority, and the applicable fiscal regime.

The principal instruments available to foreign companies are:

• Exploration contract: grants the right to conduct geological exploration within a defined block for a fixed term, typically not exceeding six years (with the possibility of extension). The exploration contract does not grant production rights — a separate production contract or combined exploration-and-production contract must be obtained before commercial extraction can begin.
• Production contract: grants extraction rights over a defined subsoil plot. The production contract is the operative instrument for any company seeking to generate hydrocarbon revenue from Kazakhstan assets.
• Combined exploration and production contract: the most common instrument for new-entrant foreign companies, this single contract covers both exploration and a subsequent production phase, with the transition from exploration to production subject to conditions precedent specified in the contract terms.
• Production sharing agreement (PSA): available for large-scale or strategically significant fields, PSAs are negotiated directly with the Government of Kazakhstan and are subject to approval at the Cabinet of Ministers level. PSAs in Kazakhstan are governed by their own framework legislation and provide for stabilisation clauses that may freeze the fiscal regime applicable to the project for the contract term.

The choice of instrument has direct implications for the applicable local-content obligations, the role of KazMunayGas (the national oil company) as a mandatory participation partner, and the extent to which the fiscal regime can be contractually stabilised.

For exploration contracts, production contracts, and combined instruments not classified as PSAs, the application is submitted to the Ministry of Energy of the Republic of Kazakhstan (MEMR). The MEMR is the central competent authority for subsoil use in the oil and gas sector.

Key procedural points:

• Applications are submitted in the Kazakh and Russian languages. All supporting documents originating abroad must be apostilled (or legalised where Kazakhstan is not party to the Hague Convention with the relevant jurisdiction) and accompanied by a notarised translation.
• The MEMR conducts a formal completeness review within a prescribed period following submission. If the application is incomplete, the applicant is notified and given a limited period to remedy deficiencies. Applications not remedied within that period are rejected without prejudice to re-submission.
• Following completeness confirmation, the application enters substantive review. This review encompasses technical, financial, environmental, and local-content assessments. The MEMR may request supplementary information during this stage.
• Once the MEMR issues a positive determination, the parties proceed to contract negotiation and execution. The subsoil use contract is a negotiated instrument, not a unilateral grant — its terms, including the work programme obligations, must be agreed between the applicant and the MEMR before the contract is signed and the licence takes effect.

Note: the transition from application submission to signed contract has historically extended to between six and eighteen months for complex applications. Companies should factor this timeline into their project financing and board approval schedules.

A subsoil use contract from the MEMR grants the right to conduct subsoil use activities but does not independently authorise construction, emissions, waste management, or the operation of hazardous industrial installations. These activities require separate permits from distinct regulatory bodies.

The principal supplementary permits and approvals in the Kazakhstan oil and gas licensing framework include:

• Environmental permit (comprehensive environmental permit or impact assessment approval): administered by the Ministry of Ecology and Natural Resources, this permit is required before exploration drilling or production operations can commence. The environmental impact assessment (OVOS) process involves public consultation requirements and can extend the pre-operational period materially.
• Industrial safety declaration: for installations classified as hazardous production objects under Kazakhstan industrial safety legislation, an industrial safety declaration is required and must be registered with the Committee for Industrial Safety.
• Approval for construction and installation works: any surface infrastructure — processing facilities, pipelines, wellhead structures — requires construction permits from local executive bodies (akimats) and, for installations above defined capacity thresholds, additional approval from central authorities.
• Water use licence: operations involving water abstraction or discharge into water bodies require a water use permit from the relevant basin authority under the Water Code.
• Permission to use radioactive materials and ionising radiation sources: where operations involve naturally occurring radioactive materials (NORM) at concentrations requiring regulatory control, separate authorisation from the Committee for Atomic and Energy Oversight applies.

For foreign companies, the parallel administration of these permits across multiple bodies — and the absence of a single-window procedure — represents a significant project management challenge. Local project teams or appointed in-country counsel typically maintain a permit-tracking register from the outset of project development.

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Kazakhstan's licensing framework incorporates mandatory local-content requirements that apply from the point of contract execution. These obligations are not advisory — non-compliance can constitute grounds for contract termination or penalty under the subsoil use contract.

The principal local-content obligations applicable to oil and gas subsoil use contracts include:

• Kazakhstani personnel requirements: the subsoil use contract specifies minimum proportions of Kazakhstani nationals that must be employed in managerial, technical, and general workforce positions. These quotas increase as the project matures from exploration to production.
• Procurement of goods and services from Kazakhstani suppliers: subsoil users are required to give priority to Kazakhstani goods, works, and services where these are available at competitive terms. Annual local-content plans must be submitted to the MEMR, and actual procurement results are subject to audit.
• KazMunayGas pre-emption and participation right: under Kazakhstan subsoil legislation, KazMunayGas (KMG), the national oil company, holds a right of pre-emption over any proposed transfer of subsoil use rights. In addition, KMG or its designee holds participation rights in commercially significant new fields, which may require foreign investors to cede a defined interest to a KMG-affiliated entity as a condition of contract award.
• Technology transfer and training obligations: large-scale production contracts may incorporate technology transfer and Kazakhstani specialist training commitments, the terms of which are negotiated at the contract stage.

Note: the local-content rules applicable to subsoil use contracts have been subject to amendment in recent years. Companies should verify the currently applicable thresholds with local counsel before executing a contract, as the commitments made at contract stage are contractually binding for the full contract term and not subject to unilateral revision by the investor.

For companies that hold assets or have operational presence in Russia or other EAEU member states, entry into Kazakhstan's oil and gas sector raises a distinct set of cross-border structuring questions that do not arise for pure new entrants.

Kazakhstan is a member of the Eurasian Economic Union (EAEU) and of the Commonwealth of Independent States (CIS). These memberships confer certain trade and customs advantages — EAEU member-state companies benefit from simplified customs procedures for goods moving within the EAEU single market, including oilfield equipment and materials — but they do not harmonise the subsoil use or licensing frameworks of member states. Each EAEU member state retains sovereign control over its natural resource regime.

The principal cross-border structuring considerations include:

• Corporate holding structure: the jurisdiction through which a foreign investor holds its Kazakhstan subsoil use interest affects dividend withholding tax rates, capital gains treatment on future disposals, and the availability of investment treaty protection. The Kazakhstan–Russia double tax treaty, the EAEU framework, and bilateral investment treaties with the investor's home state should all be reviewed before the holding structure is finalised.
• Transfer of subsoil use rights and KMG pre-emption: any future disposal of the Kazakhstan interest — whether by asset sale, share sale at the holding vehicle level, or a corporate restructuring within the wider group — triggers analysis of KMG's pre-emption right. Group restructurings that are not commercially motivated can attract regulatory scrutiny.
• Personnel mobility within the EAEU: secondment of Russian-national specialists to Kazakhstan operations is facilitated by EAEU labour mobility provisions, which remove the need for work permits for EAEU-national employees. However, Kazakhstan still applies separate qualification recognition and registration requirements for certain technical and safety roles in the extractive sector.
• Dispute resolution: subsoil use contracts in Kazakhstan commonly specify dispute resolution by international arbitration — typically the AIFC Court or a recognised international arbitral institution. Foreign investors should ensure their contracts provide for arbitration in a neutral forum and that any award is enforceable in the jurisdictions where the counterparty holds assets.

Vetrov & Partners advises on cross-border matters involving Russia and the CIS/EAEU region, and coordinates with qualified Kazakhstan-admitted counsel for matters requiring local regulatory representation. See our [Cross-border Disputes — Kazakhstan practice](/jurisdictions/kazakhstan/disputes/) and [Regulatory & Licensing — Kazakhstan overview](/jurisdictions/kazakhstan/regulatory-licensing/) for further information on the scope of regional coordination services available.

Q: Can a foreign company hold a Kazakhstan oil and gas licence directly, without a local entity?

A: Under Kazakhstan subsoil legislation, the holder of a subsoil use contract must be a legal entity incorporated under Kazakhstani law, or a foreign legal entity registered to operate in Kazakhstan through a branch or representative office. A foreign company operating solely through a parent entity without any Kazakhstani registration cannot hold a subsoil use contract in its own name. Establishing the appropriate Kazakhstan legal vehicle — whether a limited liability partnership (LLP), a joint-stock company, or a branch — is therefore a prerequisite to any licensing application. The choice of entity form affects tax treatment, liability exposure, and the mechanics of KMG participation arrangements.

Q: How long does the Kazakhstan oil and gas licensing process typically take from application to commencing operations?

A: The timeline from initial application to the commencement of operations varies materially depending on the contract type and field complexity. For a combined exploration and production contract on a new block, the period from application submission to signed contract has commonly extended to between six and eighteen months, following which environmental permitting and industrial safety approvals add a further variable period that can range from three months to over a year depending on the nature of operations planned. Companies should build a pre-operational period of at least eighteen months to two years into project financing assumptions for greenfield Kazakhstan oil and gas projects, recognising that parallel-tracking the permitting streams — rather than addressing them sequentially — is the primary lever for compression.

Q: What is the role of KazMunayGas in new oil and gas licences, and can it be structured around?

A: KazMunayGas holds statutory participation rights and pre-emption rights that attach to subsoil use contracts under Kazakhstan law. For commercially significant fields, KMG or a designated KMG affiliate will typically acquire a defined participation interest in the project as a condition of contract award — this is not a commercially negotiated outcome but a legal requirement of the Kazakhstan subsoil regime. The terms of KMG's participation, including the carry arrangements, the governance rights attached to its interest, and the exit mechanics, are however negotiated at the contract stage and can be structured to protect the commercial interests of the foreign investor within the limits set by the legislation. Foreign investors should treat KMG engagement as a transaction-management exercise, not as a regulatory obstacle to be minimised.

• [Kazakhstan company formation: options for foreign investors](/jurisdictions/kazakhstan/company-formation/)
• [Kazakhstan regulatory and licensing overview for foreign companies](/jurisdictions/kazakhstan/regulatory-licensing/)
• [Cross-border disputes involving Kazakhstan: enforcement and arbitration](/jurisdictions/kazakhstan/disputes/)

Vetrov & Partners is a Russian boutique law firm established in 2009. The firm is recognised by Pravo-300 — Russia's principal legal directory — for eight consecutive years and is listed as a trusted adviser by the German Consulate General in Novosibirsk.

The firm advises foreign companies on cross-border matters involving Russia and the CIS/EAEU region, including regulatory and licensing questions with a Kazakhstan dimension, structuring analysis for EAEU-connected projects, and cross-border coordination with admitted local counsel in member-state jurisdictions. Vetrov & Partners is a Russian-qualified law firm; for Kazakhstan-specific regulatory work requiring local admission, the firm collaborates with trusted Kazakhstan-admitted counsel.

With over 1,000 matters handled since inception, the team combines deep procedural knowledge with direct partner involvement on every engagement.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

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This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

— Aigerim Serikbayeva Contributing Regional Analyst — Kazakhstan, EAEU Trade, Customs and Market Entry vetrovpartners.com/contributions/