BUSINESS

CNOOC Makes First Foray into Kazakhstan with Oil Exploration Deal

Published: Jun. 26, 2025 4:36 a.m. GMT+8

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Signage at a CNOOC Ltd. gas station in Shanghai.

China National Offshore Oil Corp. has entered Kazakhstan’s oil and gas sector for the first time, securing a landmark deal that could deepen China’s footprint in Central Asia’s energy-rich markets.

On Tuesday, CNOOC announced that its wholly owned subsidiary, CNOOC Hong Kong Holding Limited, signed an exploration and production contract for the Zhylyoi Block with Kazakhstan’s Ministry of Energy and state-run KazMunayGas (KMG). Both CNOOC and KMG will hold a 50% stake in the block and jointly operate through a newly established venture.

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CNOOC entered Kazakhstan's oil and gas sector, signing a 50-50 exploration and production deal with KazMunayGas for the 958 sq km Zhylyoi Block, estimated to hold over 185 million tonnes of oil.
CNOOC funds all early exploration, bearing high risks, with exploratory well success rates of only 20–30%.
Kazakhstan produced 88.2 million tonnes of oil in 2024, with KMG producing 27%; major firms like Chevron and Shell are also active.

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Who’s Who

China National Offshore Oil Corp.: China National Offshore Oil Corp. (CNOOC) is China's largest offshore oil and gas producer, with operations in over 20 countries. They recently secured a landmark deal in Kazakhstan, partnering with KazMunayGas (KMG) for the Zhylyoi Block. CNOOC will fund the initial geological exploration and share a 50% stake, marking their first entry into Kazakhstan's oil and gas sector.

CNOOC Hong Kong Holding Limited: CNOOC Hong Kong Holding Limited, a wholly-owned subsidiary of China National Offshore Oil Corp. (CNOOC), has signed an exploration and production contract for Kazakhstan's Zhylyoi Block. This venture marks CNOOC's first entry into Kazakhstan's oil and gas sector, with CNOOC Hong Kong Holding Limited and Kazakhstani state-run KazMunayGas (KMG) each holding a 50% stake.

KazMunayGas: KazMunayGas (KMG) is Kazakhstan's state-run oil and gas company. It accounts for 27% of Kazakhstan's national crude oil output. KMG has partnered with China National Offshore Oil Corp. (CNOOC) to explore and develop the Zhylyoi Block, a new venture with both companies holding a 50% stake.

Shell: Shell is an international company with a presence in Kazakhstan's oil-rich market. The firm is among the international majors that dominate oil production in the country. Shell has shown interest in Kazakhstan's untapped oil reserves, which are estimated to hold up to 1.7 billion tonnes of oil.

Chevron: Chevron is among the international companies that have shown interest in Kazakhstan's untapped oil reserves, which are estimated to hold up to 1.7 billion tonnes of oil. Chevron also, alongside other major international oil companies, dominates Kazakhstan's crude oil output, with KazMunayGas accounting for 27% of the national output in 2024.

Sinopec: Sinopec is an international company that has shown interest in Kazakhstan's underdeveloped subsoil zones, which are estimated to hold significant oil reserves. Kazakhstan is seeking international partners to help explore these deep reserves, indicating potential future involvement for Sinopec in the region's energy sector.

PetroChina: PetroChina is mentioned as one of the international companies, alongside Shell, Chevron, CNOOC, and Sinopec, that have shown growing interest in Kazakhstan's untapped oil reserves. It also accounted for a significant portion of Kazakhstan's crude oil production in 2024, alongside other international majors like Chevron, ExxonMobil, Shell, and Eni.

ExxonMobil: ExxonMobil is mentioned as one of the international major oil companies operating in Kazakhstan. These companies, including ExxonMobil, contributed to a significant portion of Kazakhstan's crude oil production in 2024, with the national oil company KMG accounting for 27% of the output.

Eni: Eni is an international major contributing to Kazakhstan's oil production. In 2024, Kazakhstan produced 88.2 million tonnes of crude oil, with significant contributions from international companies like Eni, alongside Chevron, ExxonMobil, Shell, and PetroChina. These companies collectively dominate the remaining production after KazMunayGas's 27% share.

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What Happened When

October 2023：: CNOOC and KazMunayGas signed a memorandum of understanding to boost cooperation in oil and gas exploration and field services.

August 2024：: CNOOC and KazMunayGas signed a letter of intent as part of a series of follow-up agreements.

October 2024：: CNOOC and KazMunayGas signed a framework deal, paving the way for future contracts.

December 2024：: Kazinform reported growing international company interest in Kazakhstan's untapped oil reserves.

2024：: Kazakhstan produced 88.2 million tonnes of crude oil, with KMG accounting for 27% of national output.

March 2025：: During the Boao Forum, CNOOC and KazMunayGas explored offshore service cooperation opportunities in Kazakhstan.

April 30, 2025：: CNOOC and KazMunayGas signed joint activity and financing agreements for the Zhylyoi Block.

June 24, 2025：: CNOOC announced the signing of an exploration and production contract for the Zhylyoi Block with Kazakhstan’s Ministry of Energy and KazMunayGas.

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