The index is not improving over time, our oil and gas industry is still less attractive to investors than Algeria, Angola and, as noted above, sanctioned Russia.
This begs a reasonable question: what is being done wrong!?
Several assumptions can be made on these rankings.
First assumption: the measures taken by our state are insufficiently effective or adequate.
According to IHS, “the excessively high degree of regulation of the oil refining industry in Kazakhstan continues to seriously impede its development:
• Under the current processing scheme, oil suppliers have insufficient incentives to supply crude oil to Kazakhstani refineries - especially given the artificial underpricing in domestic oil product markets (as a result, netback revenues from domestic crude oil deliveries are significantly lower than in the case of export deliveries)
• Periodic bans on the import and export of petroleum products further exacerbate market distortion. "
Obviously, not everything is so simple here. The state has to keep low prices for oil products and gas for the domestic market in order to prevent social tension and obtain a synergistic effect for other sectors of the economy. But in this case, other industries and large companies should grow at a faster pace due to subsidies in the form of cheap fuels, lubricants, and gas, and it would be effective to see the annual report of the recipients of subsidies to see how they were allocated. And if there is no such growth, then it turns out that we are not developing the oil industry and are not raising other industries, which will definitely lead to disastrous consequences for the entire economy of the country.
Also, from the insights with representatives of the oil industry, we can conclude that unstable "rules of the game" have an extremely negative impact on the investment attractiveness of the industry. And, perhaps, the withdrawal of a large oil and gas concern Shell from offshore projects confirms this assumption.
Second assumption: there may be errors in the rating calculation method. An interesting point was discovered that raises a question after the study of the rating methodology. For example, the devaluation of the national currency is a negative factor that downgrades the rating, although it has a positive effect for our oil-extracting sector.
In any case, in our opinion, state institutions should pay attention to this rating and carry out work on the analysis of this rating to get a clear idea of what exactly is being done wrong or not efficiently enough. Then, set goals for increasing Kazakhstan's place in this index, develop a clear action plan and put it into operation.
Practically everyone will win, because investors will be happy to invest in our now more attractive oil and gas, the state will receive more taxes, the population will get new jobs and preserve existing ones.