Leadership transition may slow Kazakh oil reforms and IPO, says GlobalData

Following the announcement on March 19 2019 that Kazakhstan’s President Nazarbayev will step down,

Will Scargill, Senior Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the effect on the country’s oil and gas industry:

‘‘The political transition process will likely slow the ongoing reform process in the oil and gas industry, which is crucial to the economy, contributing an expected US$17bn in fiscal revenue in 2019.

‘‘Reforms are important to secure the long-term future of Kazakhstan’s oil industry, which will be relying on ramp-ups at the major Kashagan and Tengiz projects to offset production declines in the medium term. The government was hoping to attract new investment through a new tax and licensing framework put in place last year, and was planning an IPO for the national oil company KazMunayGas. However, the leadership change adds uncertainty to the reforms and the transition process may delay implementation.

‘‘Although Nazarbayev will retain some key roles, his decision to resign will doubtless slow policy-making as political dynamics are restructured. With the speaker of the upper house of parliament set to become acting president until elections, set for 2020, there will likely be significant uncertainty on policy in the short term.”  

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