Kazakhstan


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With vast natural resources, including 30 billion barrels of oil reserves and 85 trillion cubic feet of natural gas, Kazakhstan is an increasingly important player in global energy markets. The government relied on hydrocarbons for 39 percent of its revenues in 2010. Kazakhstan exports more than 1.2 million barrels of oil per day and is the world's largest uranium producer; together the mining and petroleum industries accounted for 33 percent of gross domestic product in 2010 and 82 percent of exports in 2009.


Kazakhstan's Performance on the Revenue Governance Index

Kazakhstan received a "partial" score of 57, reflecting satisfactory performance on the Safeguards & Quality Controls component but a low Enabling Environment score.

Rank
(out of 58)
Score
(out of 100)
19 Composite Score 57
28 Institutional & Legal Setting 62
Freedom of information law 33
Comprehensive sector legislation 100
EITI participation 67
Independent licensing process 83
Environmental and social impact assessments required 50
Clarity in revenue collection 83
Comprehensive public sector balance 56
SOC financial reports required 100
Fund rules defined in law 50
Subnational transfer rules defined in law 0
21 Reporting Practices 58
Licensing process 33
Contracts 0
Environmental and social impact assessments 33
Exploration data 17
Production volumes 50
Production value 33
Primary sources of revenue 100
Secondary sources of revenue 67
Subsidies 0
Operating company names 67
Comprehensive SOC reports 50
SOC production data 71
SOC revenue data 78
SOC quasi fiscal activities 100
SOC board of directors 100
Fund rules 100
Comprehensive fund reports 100
Subnational transfer rules 0
Comprehensive subnational transfer reports 67
Subnational reporting of transfers 100
9 Safeguards & Quality Controls 76
Checks on licensing process 78
Checks on budgetary process 89
Quality of government reports 42
Government disclosure of conflicts of interest 100
Quality of SOC reports 67
SOC reports audited 100
SOC use of international accounting standards 100
SOC disclosure of conflicts of interest 100
Quality of fund reports 67
Fund reports audited 17
Government follows fund rules 100
Checks on fund spending 100
Fund disclosure of conflicts of interest 0
Quality of subnational transfer reports 83
Government follows subnational transfer rules 100
32 Enabling Environment 32
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 25
Open Budget (IBP Index) 40
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 18
Government effectiveness (WGI) 44
Rule of law (WGI) 32
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 28th/58, Score: 62/100) learn more

Kazakhstan's "partial" score of 62 is the product of a detailed legislative framework but insufficient disclosure requirements.

The Oil and Gas Ministry grants hydrocarbon rights following a bidding process or direct negotiations. However, in 2007 the president imposed a moratorium on new licenses to reduce the influence of Chinese companies in the country's oil sector.

The Industry and New Technologies Ministry regulates the sector, while the Finance Ministry collects revenues from resource companies and deposits them in the National Fund of Kazakhstan.

Kazakhstan is a candidate for Extractive Industries Transparency Initiative (EITI) compliance, but has yet to complete the validation process. There are several laws relating to freedom of information in the extractive sector, although significant gaps in transparency remain.

Reporting Practices (Rank: 21st/58, Score: 58/100) learn more

The government does not provide detailed information on most aspects of the petroleum industry, leading to a "partial" score of 58.

Contracts and environmental impact assessments are not published. The Oil and Gas Ministry has yet to begin publishing relevant reports. The only data available are production volumes for two months in 2012. The Industry and New Technology Ministry publishes only historical information on reserves. The Finance Ministry publishes monthly information on the value of resource exports, production stream values, royalties, special taxes, bonuses, license fees, and the government's share of production-sharing agreements. Kazakhstan's Statistical Agency publishes some information on production volumes, prices, and the value of resource exports. EITI reports contain disaggregated figures for most taxes, dividends, and acreage fees, but do not provide data on social payments or company-by-company receipts.

Safeguards & Quality Controls (Rank: 9th/58, Score: 76/100) learn more

Kazakhstan earned a "satisfactory" score of 76, its highest of any component, partly due significant audit requirements.

Licensing decisions may be appealed and lawmakers have the right to review contract terms. The General Auditor reviews the Finance Ministry's financial statements and regularly reports to parliament. However, legislative oversight is limited; the president maintains considerable power over the extractive sector. The ruling party controls implementation of anti-corruption laws, which require government officials to disclose potential conflicts of interest.

Enabling Environment (Rank: 32nd/58, Score: 32/100) learn more

Kazakhstan's "failing" score of 32 accounts for poor global rankings on a range of governance indicators, including especially low scores on government accountability and democracy.


State-Owned Companies (Rank: 8th/45, Score: 87/100) learn more

Kazmunaygaz represents the state's interest of at least 50 percent in all production-sharing agreements. It is required to publish comprehensive audited reports, including information on operations and subsidiaries, as well as data on revenue generation and collection. The company follows international accounting standards and provides information on its board of directors and decision-making rules. Company officials are required to disclose their financial interests in the industry. However, despite these policies, a lack of effective communication with the public has provoked serious tensions between Kazmunaygaz and communities in Kazakhstan's western region.

Natural Resource Funds (Rank: 8th/23, Score: 67/100) learn more

The National Oil Fund is intended to conserve oil revenues and help balance national and regional budgets. It is controlled by the president. There are no fixed policies regarding deposits, but rules governing withdrawals are defined by legislation and generally followed. Disbursements are published in Kazakhstan's annual budget; the fund does not publish its own audited reports. The National Bank provides information on the fund's assets, transactions, and investments. However, these reports are difficult to understand and do not include disaggregated data.

Subnational Transfers (Rank: 18th/30, Score: 58/100) learn more

Some resource revenues go directly to regions where oil and gas are extracted. The government publishes information on these transfers, but does not define the rules and formulas for revenue sharing. The requirement that these payments be used for infrastructure development is often violated.

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