PRACTICE AREA · ENERGY & NATURAL RESOURCES
Energy & Natural Resources Law in Kazakhstan
Bond Stone advises international investors, energy companies, and project developers on energy and natural resources law in Kazakhstan — oil and gas transactions, subsoil use rights acquisitions, renewable energy project structuring, mining sector M&A, EPC contract review, investment contracts with the government, and regulatory licensing under the Subsoil and Subsoil Use Code. Sanat Ablakov has led Bond Stone’s energy practice since 2007. Ranked Legal 500 EMEA and IFLR1000.
Kazakhstan is Central Asia’s largest energy producer — the world’s leading uranium producer since 2009, with about 14% of world uranium resources (World Nuclear Association), major oil and gas fields at Tengiz, Kashagan, and Karachaganak, and substantial renewable energy potential across wind, solar, and hydropower. The legal framework governing energy and natural resources was substantially reformed by the Subsoil and Subsoil Use Code (Law No. 125-VI, 27 December 2017), in force from 29 June 2018, which moved solid minerals from the former contract regime to a licence regime and kept subsoil use contracts for hydrocarbons and uranium. For international investors, the key compliance obligations are the transfer permit under Article 44 of the Subsoil Code, with the state pre-emption right under Article 43 on strategic subsoil plots — a transfer without a permit may be declared invalid by a court on the competent authority’s claim — and the mandatory local content requirements that attach to subsoil use licences and contracts.
Primary authority: Subsoil and Subsoil Use Code of the Republic of Kazakhstan (Law No. 125-VI, 27 December 2017); Law on Electric Power Industry; Law on Support of Use of Renewable Energy Sources. Authority: adilet.zan.kz
Energy & Natural Resources Legal Services in Kazakhstan
Subsoil Use Rights Acquisitions
Legal due diligence on subsoil use title chains — verifying absence of regulatory non-compliance at any point in the transfer history. Managing the transfer permit under Article 44 of the Subsoil and Subsoil Use Code, from the Ministry of Industry and Construction for solid minerals or the Ministry of Energy for hydrocarbons, and the state pre-emption right under Article 43 on strategic subsoil plots, before any transfer is registered. Advising on the contract or licence obligations that pass with the right, including in-country value conditions and work programme commitments inherited from earlier contracts. A transfer without the permit may be declared invalid by a court on the competent authority’s claim. See: Energy & Subsoil Use Licensing →
Oil & Gas M&A and Due Diligence
Full-scope legal due diligence on Kazakhstan oil and gas assets — corporate title, subsoil use contract chain, environmental compliance and legacy obligations, EPC and offtake contract review, employment matters, and regulatory approvals. SPA negotiation and structuring. Clearance by the Agency for Protection and Development of Competition (APDC) where required. Bond Stone has managed oil and gas M&A due diligence mandates for Chinese, Australian, and European buyers entering Kazakhstan. See: Legal Due Diligence Kazakhstan →
Renewable Energy Project Structuring
Advising on Kazakhstan’s renewable energy framework under the Law on Support of Use of Renewable Energy Sources — wind, solar, and hydropower project development, power purchase agreement (PPA) review and negotiation, investment contract structuring with the government, regulatory approvals from the Ministry of Energy, and grid connection agreements with KEGOC. Bond Stone has advised on renewable energy project M&A and investment structuring for international sponsors and off-takers in the Kazakhstan renewable energy market.
Investment Contracts with the Government
Drafting and negotiating investment contracts between foreign investors and the Kazakhstani government for energy and infrastructure projects — tax stabilisation provisions, state support obligations, local content requirements, environmental permitting commitments, and dispute resolution clauses. Bond Stone has structured investment contracts for Chinese energy investors entering Kazakhstan on EPC and project development mandates.
EPC Contract Review & Advisory
Reviewing and advising on EPC (engineering, procurement, and construction) contracts for energy and infrastructure projects in Kazakhstan — risk allocation, performance guarantee structures, delay and disruption provisions, force majeure, variation mechanisms, and dispute resolution. Bond Stone has advised Chinese EPC contractors and project owners on EPC contract structures for hydropower, oil and gas, and industrial facility projects in Kazakhstan.
Energy Sector Joint Ventures
Structuring joint ventures for energy project development between foreign sponsors and Kazakhstani partners — JV agreement drafting, participant pre-emption rights analysis under the Law on LLPs, government notification requirements, conditions for transferring subsoil use rights, and AIFC intermediate holding vehicle structuring for tax efficiency. See: Joint Ventures in Kazakhstan →
Environmental Permitting & Compliance
Advising on environmental permitting for energy and mining projects — environmental impact assessment requirements, permitted emission limits, waste management obligations, decommissioning security obligations under the Subsoil Code, and legacy environmental liability assessment in subsoil asset acquisitions. Bond Stone advises on environmental compliance as an integrated component of energy project M&A due diligence and post-acquisition integration.
Mining Sector M&A
Legal due diligence and transaction structuring for acquisitions of Kazakhstani mining assets — solid mineral subsoil use licences, licence chain verification, transfer permits and the state pre-emption right, obligations that pass with the subsoil use right, in-country value compliance, decommissioning security assessment, and APDC merger control filings. Kazakhstan holds significant gold, copper, uranium, and rare earth reserves that attract international mining investors requiring Kazakhstani legal support on acquisition mandates. See: Mining & Metals Industry →
Energy Law — Detailed Guides
Acquiring subsoil use rights, state pre-emption, joint ventures and AIFC holding structures.
Energy & Subsoil Use Licensing
Subsoil use licences and contracts, application procedure, state pre-emption right, local content obligations — Read more →
Full M&A cycle — due diligence, SPA negotiation, APDC clearance — for energy and mining sector acquisitions — Read more →
Legal Due Diligence Kazakhstan
Corporate title, subsoil title chain, environmental compliance, EPC contracts, employment — energy sector due diligence — Read more →
Foreign Investment in Kazakhstan
Investment contracts, tax incentives, SEZs, profit repatriation — for energy sector foreign investors entering Kazakhstan — Read more →
Energy & Natural Resources Industry Hub
Kazakhstan’s energy sector overview — oil and gas, renewable energy, uranium, mining — Bond Stone’s industry presence — Read more →
Key Facts — Kazakhstan Energy & Natural Resources
| AREA | KEY LEGAL REQUIREMENT | CONSEQUENCE OF NON-COMPLIANCE |
|---|---|---|
| Transfer of subsoil use rights | Permit from the competent authority under Art. 44 Subsoil Code before closing; state pre-emption right under Art. 43 on strategic subsoil plots | Transfer may be declared invalid by a court on the competent authority’s claim. |
| Local content | Mandatory local content obligations attach to subsoil use licences and contracts — Kazakhstani goods, works, services, and personnel | Penalties under the contract; under a solid minerals mining licence, 30% of the shortfall in works and services |
| Decommissioning security | Security for decommissioning obligations required in the cases set by the Subsoil Code (guarantee, bank deposit pledge or insurance) | On a transfer, the seller stays liable until the acquirer provides security |
| Renewable energy — PPA | Long-term purchase by the Single Buyer for new projects follows an auction; fixed tariffs remain only in contracts made before the auction provisions took effect | No sale to the Single Buyer at a support price without an auction award or an existing contract |
| APDC merger control | Prior APDC consent for acquisitions of more than 50% of voting shares, and post-closing notification for asset acquisitions, where thresholds are met | Invalidation by a court on the APDC’s claim if competition was restricted + administrative fine |
Selected Experience — Energy & Natural Resources Kazakhstan
Bond Stone has advised on energy transactions and natural resources mandates in Kazakhstan since 2007 — for Chinese, Australian, European, and Gulf investors across oil and gas, hydropower, renewable energy, copper, and uranium sectors. Sanat Ablakov has led all major energy mandates personally.
Oil & Gas · Kazakhstan · China · M&A
KazMunayGaz / CEFC China Energy — KMG International acquisition
Bond Stone acted as lead Kazakhstani counsel on CEFC China Energy’s acquisition of a 51% stake in KazMunayGaz International — holding the Petromidia Navodari refinery in Romania and Eastern European fuel distribution assets. Kazakhstani legal layer: corporate structuring, regulatory approvals, state notification requirements, and coordination with international counsel teams. Kazakhstan’s largest single Chinese corporate investment. Transaction value: USD 3.68 billion. Founder & Managing Partner: Sanat Ablakov.
Hydropower · Kazakhstan · China · Project Development
Moinak Hydropower Plant — CWE / China Three Gorges
Bond Stone acted as legal consultant for China International Water and Electric Corporation (CWE, a subsidiary of China Three Gorges Corporation) on the Moinak Hydropower Plant — 300MW facility on the Charyn River, Almaty Region. Kazakhstan’s first major Sino-Kazakh energy infrastructure project. Investment contract structuring with the Kazakhstani government, EPC contract review, environmental permitting, government liaison through to commissioning. Transaction value: USD 360 million. Founder & Managing Partner: Sanat Ablakov.
Renewable Energy · Kazakhstan · China · Ongoing Mandate
CWE Alternative Energy — renewable energy portfolio mandate
Ongoing Kazakhstani counsel for CWE (China Three Gorges) on its renewable energy portfolio mandate in Kazakhstan — wind, solar, and hydropower project assessment, M&A advisory for project acquisitions, investment contract structuring, and regulatory compliance under the Law on Support of Use of Renewable Energy Sources. Multi-project mandate. Founder & Managing Partner: Sanat Ablakov.
Mining & Metals · Kazakhstan
Copper cathode plant — Karaganda Region
Bond Stone advised the engineering contractor on a heap-leach copper cathode plant in Karaganda Region: branch registration, subsoil licensing, construction permitting, environmental compliance and regulatory matters. Founder & Managing Partner: Sanat Ablakov.
Energy · Kazakhstan · Infrastructure
KEGOC national grid legal audit
Legal audit of Kazakhstan’s national electricity transmission operator (KEGOC) for infrastructure investor clients — corporate compliance, regulatory risk, licence framework, concession structure, and regulatory exposure assessment. Mandate value: USD 13 million. Founder & Managing Partner: Sanat Ablakov.
Mining · Kazakhstan · Subsoil
Subsoil licence acquisition — international mining investor
Advising an international mining investor on the acquisition of a Kazakhstan subsoil use licence — licence chain due diligence, transfer permit from the competent authority under Article 44 of the Subsoil Code, obtained before any transfer was registered, and participation interest obligation analysis inherited from the prior contractual regime. Founder & Managing Partner: Sanat Ablakov.
Oil & Gas · Kazakhstan · Chevron
Tengizchevroil — Kulsary water system
Bond Stone provided legal support to Tengizchevroil — the Chevron-operated oil and gas joint venture at the Tengiz field, one of the world’s largest oil fields — in 2012 on construction and regulatory matters for the reconstruction of the Kulsary water system in Atyrau Region. Founder & Managing Partner: Sanat Ablakov.
Why Bond Stone for Kazakhstan Energy & Natural Resources
18+ years energy sector experience in Kazakhstan — Sanat Ablakov has personally led Bond Stone’s energy practice since 2007, advising on transactions including CWE’s Moinak HPP (USD 360 million) and CEFC’s KMG International acquisition (USD 3.68 billion)
Chinese investor expertise — Bond Stone advises Chinese energy investors entering through EPC, M&A, and joint venture structures — with established relationships with CWE, China Three Gorges, and CEFC China Energy
Subsoil Code specialist — transfer permits and the state pre-emption right, local content compliance, and title chain due diligence managed as conditions precedent in every energy M&A mandate
Full transaction cycle on one mandate — energy M&A due diligence, licence compliance, EPC review, investment contract, and APDC clearance without separate specialist counsel for each workstream
Ranked Legal 500 EMEA and IFLR1000 in Kazakhstan — Almaty and Astana offices
Primary legal authority: adilet.zan.kz
Bond Stone Kazakhstan offices: Almaty · Astana
Related Industry Practice
Energy and natural resources law underlies mining and metals work. See the mining and metals industry guide.
Frequently Asked Questions — Energy & Natural Resources in Kazakhstan
What is the state pre-emption right under Article 43 of the Subsoil Code and why does it matter?
Article 43 of Kazakhstan's Subsoil and Subsoil Use Code (Law No. 125-VI, 2017) gives the state a priority right to acquire subsoil use rights and linked shares, including shares in offshore holding structures able to determine the subsoil user's decisions, when they are sold on a strategic subsoil plot: a plot with more than 50 million tonnes of oil or 15 billion cubic metres of natural gas, a plot in the Kazakhstani sector of the Caspian Sea, or a plot containing a uranium deposit. The right does not apply to other assets. It is considered together with the transfer permit under Article 44, and the review takes up to three months for strategic plots. The state buys through a national holding or national company on price and payment terms no worse than those in the application. A transfer without a permit may be declared invalid by a court on the competent authority's claim. Treat the permit as a condition precedent on any subsoil M&A deal.
What local content obligations apply to subsoil users in Kazakhstan?
Subsoil use licences and contracts carry mandatory local content obligations, which the Code now calls in-country value — requirements to give preference to Kazakhstani personnel and to procure Kazakhstani goods, works and services. The in-country value of works and services must be at least 70% of those purchased in a calendar year, with an exception for complex Caspian projects (Article 28). These obligations are monitored by the Ministry of Industry and Construction for solid minerals and the Ministry of Energy for hydrocarbons. Non-compliance leads to penalties under the contract and, under a solid minerals mining licence, a penalty of 30% of the shortfall in works and services. A licence issued in place of an earlier contract may carry additional obligations.
How does a new renewable energy project obtain a long-term PPA in Kazakhstan?
Through an auction, not a fixed tariff. Under the Law on Support of Use of Renewable Energy Sources, an organiser designated by the Ministry of Energy runs electronic auctions for new facilities. A generator on the Ministry’s list after an auction signs a purchase contract with the Single Buyer, which buys for 20 years at the auction price, indexed each year. Fixed tariffs remain only in contracts made before the auction provisions took effect. A generator may instead sell under bilateral contracts. Grid connection is arranged separately with the network company. See Energy & Subsoil Use Licensing.
What due diligence is required when acquiring subsoil use rights in Kazakhstan?
Subsoil acquisition due diligence covers: the full title chain from the original state grant through every transfer; regulatory compliance at each transfer point (particularly transfer permits and the state pre-emption right); current work programme obligations and performance history; local content compliance record; environmental obligations and decommissioning security; and any other obligations under the contract or licence that pass to the buyer. A single non-compliant transfer in the chain can jeopardise the current owner's title.
How are investment contracts with the Kazakhstani government structured for energy projects?
Investment contracts with the Kazakhstani government for energy and infrastructure projects are structured under Entrepreneurial Code Chapter 25 and applicable sector legislation. Key provisions include: tax stability for the period of the preferences (Tax Code, Article 736, under which corporate income tax relief on new production under an investment agreement runs for up to ten years); state support obligations; local content commitments; environmental permitting milestones; and dispute resolution clauses. Bond Stone has structured investment contracts for Chinese energy investors on EPC and project development mandates — including the Moinak Hydropower Plant (CWE/China Three Gorges, USD 360 million) and renewable energy mandates for CWE's Kazakhstan portfolio.
Discuss your Kazakhstan energy matter
Contact Bond Stone for a confidential discussion about subsoil use rights, energy project structuring, oil and gas M&A, or renewable energy investment in Kazakhstan.
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