Original Coverage & Source Attribution: kz.kursiv.media
Askhat Khassenov, CEO of Kazakhstan’s KazMunayGas (KMG), told reporters last week that Russia’s Lukoil, which is subject to Western sanctions, remains a strategic partner of the national oil and gas company.
He said KMG is working to resolve financing issues affecting Kalamkas-Khazar Operating (KKO), a joint venture whose bank accounts have been closed because of sanctions-related restrictions.
«Lukoil is our strategic partner. There are currently restrictions, as you know, on our ability to secure financing, but we are working to resolve these issues,» Khassenov said.
The KMG chief added that the company continues to seek solutions to the challenges affecting its cooperation with the Russian oil producer.
The U.S. has extended the deadline for Lukoil to sell its stakes in international projects until Nov. 21, 2026.
Joint venture reports billions in losses
According to KKO’s published financial statements, the company recorded a net loss of 7.3 billion tenge in 2025, compared with a loss of 9.2 billion tenge in 2024. Its accumulated losses reached 16.9 billion tenge by the end of 2025.
The value of KKO’s oil and gas exploration and production assets increased to 50.8 billion tenge at the end of 2025, up from 27.9 billion tenge a year earlier. The company spent 12.5 billion tenge on geological exploration during 2025.
KKO is owned equally by KMG and Lukoil, with each holding a 50% stake.
All of KKO’s bank accounts were closed in 2025 amid sanctions-related restrictions on Lukoil. The company had no active bank accounts at the end of the year, complicating the further development of the project.
Lukoil’s principal shareholder is Russian businessman Vagit Alekperov, whose net worth is estimated at $29.5 billion, according to the local Forbes ranking, placing him third on the list. On Oct. 7, President Kassym-Jomart Tokayev met with Alekperov to discuss Lukoil’s operations in Kazakhstan and joint oil and gas projects. No specific details of the meeting were disclosed.
Final investment decision remains on hold
On Feb. 27, 2023, KMG signed a 45-year contract to develop the Kalamkas-Sea, Khazar and Auezov fields. The subsoil use rights were transferred to KKO on April 11, 2023.
The company is still awaiting a final investment decision (FID) on the project.
The FID for the project, which has an estimated budget of approximately $6.5 billion, was initially scheduled for December 2025. However, U.S. sanctions against Lukoil have disrupted those plans.
By the end of 2025, an unnamed Chinese investor had been mentioned as a potential buyer of Lukoil’s stake in KKO. A sale could potentially have helped remove sanctions-related obstacles to the project’s development. However, nearly a year after Western sanctions were imposed, no deal had been announced.
Project location and production outlook
The Kalamkas-Khazar block, which includes the Kalamkas-Sea and Khazar fields, is located in the North Caspian Basin within Kazakhstan’s sector of the Caspian Sea. It lies about 120 kilometers from the Kashagan field and 60 kilometers from the Buzachi Peninsula in the Mangystau region.
Kazakhstan’s Ministry of Energy had expected KKO to begin offshore production between 2028 and 2029. At peak capacity, annual oil production is projected to reach 4 million tons.
Oil reserves at the Kalamkas-Sea block have been estimated at 81 million tons, while gas reserves are projected to reach 22 billion meters. The project is expected to attract approximately $6.4 billion in investment.
Lukoil’s sanctions timeline
The U.K. added Lukoil to its sanctions list on Oct. 15, 2025, and the company subsequently became subject to U.S. sanctions as well. The restrictions have complicated the development of KKO’s project with KMG.
On Oct. 14, 2025, one day before the U.K. sanctions were announced, Alekperov met with Tokayev in Astana to discuss expanding cooperation in Kazakhstan and mark the 30th anniversary of Lukoil’s operations in the country.
Before Lukoil was added to the sanctions lists, Alekperov was ranked the wealthiest Russian in 2025, with an estimated net worth of $28.7 billion.
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