In the early 1990s, as Kazakhstan just gained its independence and opened its doors to foreign investors, one name stood out: Shell. The multinational oil and gas giant saw great potential in the country's energy sector and embarked on a journey that would transform the industry, boost the local economy and contribute to the development of local communities. Today, three decades later, Shell's investment in Kazakhstan has helped the country become a major player in the global energy market, and its presence in the region continues to shape the country's energy landscape. With an investment of over $18 billion, Shell is one of the largest foreign direct investors in Kazakhstan, having interests in such projects like the North Caspian Sea Production Sharing Agreement, Karachaganak Final Production Sharing Agreement and Caspian Pipeline Consortium.

Green progress

In recent years, the energy industry has witnessed a significant shift towards renewable energy sources as governments and corporations worldwide seek to tackle climate change. Shell is one of the companies at the forefront of this energy transition, that adopted an ambitious green strategy in response to increasing demand for cleaner energy. As a roadmap for the energy transition, the company launched its Powering Progress strategy, that outlines commitment to reducing its carbon emissions. In Kazakhstan, where Shell has a significant presence, the company has been taking steps to reduce its carbon footprint and support the country’s transition towards a low-carbon economy.

One example of Shell's efforts to implement its Powering Progress strategy in Kazakhstan is the energy assessments, that had been initiated at the company’s joint ventures in Kazakhstan, the North Caspian Operating Company and Karachaganak Petroleum Operating, to identify possible abatement opportunities to reduce greenhouse gas (GHG) emissions. This allowed NCOC to adopt and start implementing the GHG Emissions and Energy Efficiency Management Strategy, which sets out specific objectives and plans for achieving 15-25% GHG emissions reduction by 2030. A similar strategy has been developed by KPO, with both companies envisioning key activities on energy efficiency improvement, waste heat recovery, renewable energy generation, gas flaring minimization, as well as carbon capture, utilization, and storage (CCUS).

Shell Kazakhstan is also actively contributing to shaping the renewable energy policy regime in the country, which has been a major issue holding back developers and investors. In partnership with other international oil companies and leading institutions, Shell has been addressing a number of issues to improve the investment climate, including the bankability of Power Purchase Agreements (PPA), extension of the PPA duration, long-term financial stability of the off-taker of renewable energy, inclusion of renewable energy projects into the national list of priority investment opportunities, annual inflation indexation of auction prices, and changes in the exchange rate, providing investment preferences.

Shell Kazakhstan is also contributing to the development of CCUS technology in the country. In 2021, Shell Kazakhstan and “KazMunayGas” signed a Memorandum of Cooperation on CCUS. The Memorandum provided for joint exploration of potential opportunities for implementation of the CCUS Pilot Project seeking to identify and develop the main criteria for carbon capture and utilization. As part of the Memorandum signed, Shell's technical experts shared their international experience in implementing similar CCUS projects worldwide.

Solar for schools

As part of Shell Kazakhstan’s social investment strategy, the company has been implementing its ‘Solar for Schools’ initiative for the past five years. Shell Kazakhstan has successfully commissioned solar stations in schools in Astana, Uralsk, Aktau, and Atyrau, with launching of another solar energy system in Turkestan school this year. The primary goal is to encourage young people's interest in sciences, technology, engineering, and mathematics (STEM) and raise awareness of the benefits and opportunities of renewable energy. The project serves as a unique platform to develop small scale distributed green energy systems in 5 cities across the country. This initiative also focuses on attracting local companies to design, procure, and build specialized systems equipped with solar photovoltaic panels for each school. As part of the project, the company organizes a special educational program, "Shell NXplorers," for students and teachers to motivate Kazakh teenagers to study energy transition issues and help them develop energy-efficient thinking.

The photovoltaic panel systems were specifically designed to meet the needs of these schools and are capable of generating 100 kW of energy for each school. These systems can cover in average 30% of the schools' annual energy consumption, reduce expenses of utilities cost, and redirect excess electricity generated into city electrical grid, thereby providing significant energy savings.

30 years of impactful collaboration for sustainable future

Shell Kazakhstan is also involved in advocacy work via the Foreign Investors Council and Kazenergy associations, with a current focus on improving the regulatory framework in relation to Emission Trading System, Cross-Border Adjustment Mechanism, and CCUS. With these initiatives, Shell Kazakhstan is making significant strides towards a sustainable energy future in Kazakhstan, and its efforts are contributing to the country's progress towards a low-carbon economy. Overall, Shell's Powering Progress strategy is a global effort, and its implementation in Kazakhstan is just one example of the company's commitment to reducing its carbon footprint and contributing to a more sustainable future.