This week, the media in the region covered several energy stories, such as the Russian energy firm Inteco Group concluding a deal to drill for oil in Afghanistan, Uzbekistan doubling its oil exports to China, KazMunayGas committing to raising output at the Kashagan field, and Russia promising to increase oil deliveries to China through Kazakhstan. Several outlets reported on the Organization of Turkic States’ summit in Budapest and President Mirziyoyev’s visit to Slovenia. They also noted the 16^th Meeting of the Kazakhstani-German Business Council in Astana and Kazakhstan’s plans for a cryptocurrency reserve. Other sources highlighted Uzbekistan adding 1.1 million jobs in 2025, as remittances rose 32% to $3.3 billion over the same period.

Investment:

The 16^th meeting of the Kazakhstani-German Business Council took place in Astana on May 20 (The Astana Times). Opening the meeting, the Deputy Co-Chair of the Kazakhstan-German Business Council (KGBC) and Chair of Baiterek Holding, Rustam Karagoishin, noted that Kazakhstan and Germany are pursuing 63 joint projects worth an estimated $54.4 billion, with 32 ventures valued at $1.1 billion already completed and another 12 in progress. He also highlighted that Kazakhstan accounts for 83% of Germany’s trade with Central Asia. The German Co-Chair of the KGBC, Michael Harms, commended Kazakhstan for its significant reforms in the investment and financial sectors and emphasized that German companies are eager to participate in the processing and engineering sectors. The meeting explored improvements in Kazakhstan’s investment climate, financing mechanisms, and several new projects. During the meeting, both sides signed several cooperation agreements and memoranda of understanding (Daryo). Zhezkazganredmet and DAR Metall AG concluded a cooperation agreement, while the Development Bank of Kazakhstan and KfW Development Bank signed a term sheet. Baiterek Holding and KfW Development Bank, as well as Kazakhstan Petrochemical Industries and IMI Zimmermann & Jansen Technologies, signed memoranda of understanding.

During a government meeting held on May 21, the Kazakhstani government reviewed five significant projects in the metallurgical and petrochemical industries (The Astana Times). The projects will see a total investment of $19.5 billion and create 8000 jobs. The construction of a new processing plant for high-carbon sulphide gold-bearing concentrates in the Pavlodar region is underway. The plant will cost $978 million, creating 500 jobs. It will process 300,000 tons of gold-bearing concentrate and produce up to 15 tons of gold annually. Meanwhile, the China Tianchen Engineering Corporation is building a $900 million butadiene and derivatives plant in the Atyrau region, producing 305,000 tons per year and employing 750 people. KazMunayGas PetroChem is constructing a $1.5 billion polyethylene terephthalate plant in Atyrau. They expect the plant to produce 735000 tons annually and create 400 jobs. Construction work is also continuing on a $7.4 billion integrated gas chemical complex, which will employ 800 people and produce 1.25 million tons of 20 different grades of polyethylene annually. They will also build an adjacent gas separation plant for $2.7 billion, creating 400 jobs and extracting 1.6 million tons of ethane and 355,000 tons of propane every year. The meeting, led by Prime Minister Olzhas Bektenov, reviewed the expansion of the Shymkent oil refinery, which aims to increase its processing capacity from 6 million to 12 million tons per year.

Carlsberg and PepsiCo will build a new $250 million soft drinks plant in the Almaty region (Kursiv). The plant will manufacture 340 million liters of soft drinks annually, employing 500 people. During a meeting with the First Deputy Prime Minister of Kazakhstan, Roman Sklyar, Danish Ambassador Jesper Vahr emphasized that the plant would add value to local agricultural produce, a key priority of the Kazakhstani government. Kursiv reported that PepsiCo plans to invest $320 million in a Lays plant in Almaty (Kursiv).

Energy:

Inteco Group, a Russian energy company, has signed a deal with the Taliban to extract oil in Afghanistan (Daryo). They finalized the agreement during the Russia-Islamic World Economic Forum in Kazan. Afghanistan’s Acting Minister of Industry and Commerce, Nooruddin Azizi, signed the deal with representatives of Inteco Group. The Head of the Russian Trade Centre in Kabul, Rustam Khabibullin, noted that Inteco Group had already conducted geological surveys and was ready to begin drilling operations. Under the deal, Inteco will also construct Afghanistan’s first oil refinery. At the forum, representatives of both countries signed several MoU concerning transport, commerce, gas exploration, and establishing a trade-industrial center. Russian Deputy Prime Minister for Economic Affairs Alexey Overchuk and Afghan Deputy Prime Minister Mullah Abdul Ghani Baradar signed the memoranda.

According to Uzbekistan’s National Statistics Committee, the country nearly doubled gas exports to China in the first four months of 2025 (Kun). Uzbekistan remained a net gas exporter from January to April despite domestic shortages and pledges to end exports. While gas imports from Russia and Turkmenistan plummeted three times to $150.5 million, gas exports to China surged 85% to $199.7 million over the same period. However, the Chinese authorities reported that China imported $143 million of natural gas in the first four months of the year. This volume is still double the volume that Uzbekistan exported in the same period in 2024. The surge in gas exports comes after a winter of gas shortages and follows years of pledges to curtail gas exports.

Kazatomprom, Kazakhstan’s national atomic company and the world’s largest producer of uranium, recently held negotiations with Romania’s SN Nuclearelectrica S.A. on a ten-year contract to increase its supply of uranium (Kursiv). They also explored the prospect of Kazatomprom’s subsidiary, Ulba Metallurgical Plant, processing Romanian beryllium. In 2024, Kazatomprom produced 12300 tons of uranium, an increase of 10% on the 11400 tons produced in 2023. Meanwhile, beryllium production fell to 735.1 tons in 2024, compared to 842.8 tons in 2023. Tantalum production decreased from 153.8 tons in 2023 to 135.1 tons in 2024. However, the company reported revenues of $3.5 billion, compared to $2.8 billion in 2023.

KazMunayGas has reported that production at the Kashagan oil field in the Caspian Sea will reach 17.8 million tons this year (Kursiv). KazMunayGas CEO Askhat Khassenov announced the latest production forecast during a meeting with the President of Shell’s Exploration and Production Division, Peter Costello. Last year, the field produced 17.4 million tons of crude oil. While production at the field has fluctuated, with 10.8 million tons produced in 2023 and 12.7 million tons in 2022, last year, the NCOC unveiled a plan to increase daily production from 370,000 to 450,000 barrels per day in 2025 and 2026. At the same time, the Karachaganak field produced 3.8 million tons in the first four months of the year and is on track to exceed its annual production plan. KazMunayGas previously expected the field to produce 11.14 million tons of crude oil and 25.57 billion cubic meters of natural gas. The field produced 11 million tons of crude oil in 2024. Recently, we covered multiple contradictory reports and statements on Kazakhstan’s plans to increase its oil output and whether it would fulfil its obligations to OPEC+ and compensate for past overproduction.

Russian Deputy Prime Minister Alexander Novak recently revealed that Beijing requested Moscow to increase its oil supply through Kazakhstan to China by 2.5 million tons annually (Orda.kz). According to Novak, Moscow is prepared to increase the oil supply to Western China, with work underway to increase pipeline capacity. In early May, Russia approved a protocol amending the intergovernmental agreement between Russia and China on the oil trade. Under the new protocol, the authorities can increase the amount of oil shipped to China through Kazakhstan from 10 million to 12.5 million tons annually. Both sides have also extended the agreement covering these deliveries until 2034. The expansion of Russian energy imports comes as China has suspended nearly all purchases of U.S. energy.

Diplomatic Events:

On May 21, Hungarian Prime Minister Viktor Orban hosted an informal summit of the Organization of Turkic States in Budapest (Caspian News). The summit brought together the leaders of Türkiye, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Azerbaijan, and Hungary to discuss climate action, defense cooperation, investment cooperation, trade, and the humanitarian situations in Afghanistan and Gaza. In order to boost intra-regional trade, President Mirziyoyev proposed launching the “Turk-Trade” online platform and a single customs system (Daryo). Kazakhstani President Kassym-Jomart Tokayev highlighted the need to diversify trade routes and supply lines and addressed several critical environmental concerns, such as the drop in the Caspian’s water level (The Astana Times). After their deliberations, they adopted the Budapest Declaration (Caspian News). The Declaration reaffirmed their commitment to the Charter of the Turkic World, the Turkic Green Vision, and the Baku Climate Unity Pact, concluded at COP29 in Azerbaijan; pledged to combat terrorism, commended Türkiye’s efforts to stabilize Syria, underlined the importance of strengthening defense cooperation, welcomed the Simplified Customs Agreement, and endorsed the Turkic Investment Fund, among others. They also adopted a joint statement on Afghanistan, pledging increased humanitarian and economic aid.

During his visit to Hungary for the OTS summit, Uzbekistani President Shavkat Mirziyoyev held talks with Hungarian Prime Minister Viktor Orban and several Hungarian business leaders (Daryo). Representatives of OTP Bank, BDPST Group, 4iG, Indotek, MVM, Duna Group, MOL Group, H2O Consortium, Inpark, and Wizz Air attended the forum. President Mirziyoyev highlighted OTP Bank’s acquisition of a leading Uzbekistani bank and its upcoming plans to initiate several new lending and investment programs. Additionally, he noted that Inpark will manage a new industrial zone under construction in Tashkent. At the conclusion of their discussions, they signed multiple agreements and investment deals. President Mirziyoyev also met with Prime Minister Viktor Orban. The two leaders finalized their countries’ strategic partnership, adopted a joint declaration, and concluded several other agreements, including an extradition treaty and an agreement on cooperation in the fight against climate change, nuclear energy, disaster relief, and scientific research.

Uzbekistani President Shavkat Mirziyoyev visited Slovenia on May 21-22 (UZ Daily). He met Slovenian President Nataša Pirc Musar and Prime Minister Robert Golob during his visit. Their discussions focused on trade, investment, green energy, pharmaceuticals, and digital technologies. They set a target of increasing bilateral trade from $175.74 million in 2024 to $500 million annually through expanding trade in expanded trade in textiles, fruits and vegetables, mineral fertilizers, copper, and pharmaceuticals (Gazeta.uz). After their meetings, they signed a joint statement and several bilateral agreements, including an industrial cooperation program, the mutual recognition of diplomas, transport, standardization, water management, culture, and tourism (Daryo). They also approved the drafting of a new migration deal and agreed to hold the first intergovernmental commission meeting in Ljubljana in July. An Uzbekistani-Slovenian business forum also took place, with representatives of 100 companies from both countries in attendance. (Daryo). During his address, he emphasised the need to establish direct flights and utilise the Slovenian port of Koper to improve connectivity between Uzbekistan and the EU. After the forum, they signed several agreements pertaining to pharmaceuticals, urban development, copper product manufacturing, fruit and vegetable processing, railway infrastructure development, construction of micro-hydropower plants, and the electrical engineering sector (Gazeta.uz).

Water Management:

The World Bank has approved a $200 million loan to upgrade irrigation infrastructure in Uzbekistan (Gazeta.uz). The Uzbekistani government will also contribute $23.2 million to the endeavor. The project envisages the construction of 259 kilometers of concrete canals, the elevation of canal beds to remove the need for pumps, the equipping of canal outlets with flowmeters and supervisory control and data acquisition systems, and the 470 hydraulic structures. Overall, it will increase the irrigation system's efficiency in five regions. This project is part of a larger World Bank program to improve water efficiency and conservation across Central Asia, a region expected to face significant water shortages due to climate change. According to the World Bank’s statement, water shortages will worsen in Central Asia due to reduced water flows from glaciers and rainfall and increased evapotranspiration and droughts, reducing water availability by 30-40%. At the same time, as the region’s population and demand for food grow, irrigation demand will rise by 25%. They also underlined the obsolescence and inefficiency of much of the country’s irrigation infrastructure. For instance, 56% of Uzbekistan’s irrigated land depends on water pumps, which consume about 16% of the country’s electricity. Once implemented, the project is expected to save 540 million cubic meters of water and 165 million kWh of electricity annually while improving irrigation across 232000 hectares.

Labor and Migration:

In a recent interview, the Deputy Head of the Labor Inspectorate under the Ministry of Employment, Nilufar Amanniyazova, revealed that Uzbekistan created 1.1 million jobs between January and April this year (Kun). Most new jobs are in the agriculture, construction, and service sectors. She also confirmed that the Labor Inspectorate is working to formalize the status of workers in the informal economy, claiming that since February 2025, they have registered 22900 such workers. Meanwhile, remittances to Uzbekistan increased by 32% to $3.3 billion in the first quarter of 2025 (UZ Daily). In January, Uzbekistani workers abroad sent over $1 billion home; in February, they sent another billion, and in March, they sent $1.2 billion. Reports attribute this growth to increased migration to countries with higher wages and the strengthening of the currencies of Uzbekistan’s main trading partners.

Finance:

Kazakhstan’s Ministry of Digital Development, Innovations and Aerospace Industry plans to establish a cryptocurrency reserve (Kursiv). The Ministry claimed that the reserve would contribute to the development of the digital economy and enable Kazakhstan to respond to fluctuations in the global financial system more effectively. They also added they were currently examining a range of possible cryptocurrencies for the reserve. The timeline for the initiative remains unknown. Earlier, we reported on Kyrgyzstan’s establishment of a National Council for the Development of Virtual Assets and Blockchain Technologies.