Tengiz Expansion Drives Economic Growth, But Oil Output May Decline in Second Half of 2025

The expansion project at the Tengiz oil field has been the main driver of Kazakhstan’s economic growth in the first half of 2025. However, oil production at the field may decline in the second half of the year, Orda.kz reports.

In their latest review, Halyk Finance analysts warnthat Kazakhstan may once again see a reduction in oil production by the end of the year.

They note that the Tengiz expansion boosted the country’s economy, contributing to GDP growth. Increased output at the key field spurred development in related sectors, including oil and gas production, transport, and wholesale trade.

The mining industry saw a year-on-year increase of 8.4% (compared to just 0.3% in the first half of 2024).

The growth was mainly due to the increase in crude oil and natural gas production (+11.4% year-on-year), whose share in the industry structure was 71.9%. The main source of this acceleration was the active increase in production at the Tengiz field, which, in our opinion, became one of the key factors that ensured the acceleration of the country's economic growth in the first six months of 2025,
 says Arslan Aronov, senior analyst at Halyk Finance.

The manufacturing sector also grew in the first half of the year, but its core component — metallurgy, which accounts for 40.1% of its volume — showed minimal growth (+0.1% year-on-year).

Growth in the energy sector was also modest (+0.5%).

The fact that these sectors are showing negative dynamics or minimal growth while GDP accelerated to 6.2% may indicate the unsustainability of such a sharp acceleration of economic growth. In the coming months, the pace of expansion in the mining sector may slow down against the backdrop of the completion of the Tengiz field modernization project in the second half of 2025, which will likely lead to a reduction in the growth rate of oil production and may also limit the dynamics of the industrial sector by the end of the year,
 Arslan Aronov predicts.

Original Author: Nikita Drobny