Kazakhstan to produce shale oil for first time in 2025

Kazakhstan will produce shale oil for the first time later this year, officials said Tuesday, hoping to boost the Central Asian state's flagging economy.

The country has been hit by a decline in oil prices since 2022 and faces high inflation and a weakening currency.

"The first production of shale oil in Kazakhstan is expected this year," Prime Minister Olzhas Bektenov told a government meeting.

President Kassym-Jomart Tokayev said Kazakhstan needed to exploit "technologically complex oil deposits" as well as the vast "reserves of shale oil".

Kazakhstan is a major energy producer, with the oil and gas industry accounting for around 20 percent of the national economy.

It has agreed to limit oil production as part of an agreement with the OPEC+ group of energy exporters, but regularly exceeds its quota.

Shale oil extraction is complicated and specifically outlawed in some countries, including France, because of the dangers it poses to the environment and people.

The process involves a method known as fracking, or drilling into the ground to extract oil and gas from shale rock.

Tokayev said shale oil production was needed with the Kazakh economy growing "insufficiently."

GDP expanded by 4.8 percent last year, but inflation is still high, at 8.6 percent, and the local currency -- the tenge -- is losing ground against the US dollar.

The economy has also been hit by fallout from Russia's invasion of Ukraine, with Kazakhstan -- a close ally and trading partner of Moscow -- saying it suffers under sanctions.

"Tariff disputes and confrontation via sanctions are becoming the new reality of the global economy," Tokayev said.

He called for more foreign investment into Kazakhstan's energy and rare metals sectors and wanted existing production-sharing deals to be rewritten on terms more "favourable" to Astana.

Many Western energy companies, including Total, Eni, ExxonMobil and Shell have operations in the country.

Tokayev hailed the investments as a "major contribution to the country's socio-economic development."