The Eni-led $50 billion-plus project Kashagan project offshore Kazakhstan has received a major boost for the next phase of its production expansion plans, after Kazakh authorities completed the takeover of a privately held venture to build a key processing facility.

Kashagan is the country’s largest offshore oil and gas development and, together with Tengiz and Karachaganak, is one of three giant foreign-led oil schemes in Kazkahstan, a major supplier of world crude.

Kazakh authorities caried out the takeover after growing increasingly concerned about possible difficulties in selling crude to international markets after the energy transition subdues global demand for fossil fuels.

State investment and holding vehicle Samruk-Kazyna said in a regulatory disclosure that it had completed a deal with Kazakh privately owned GPC Investment, taking a 100% stake in the company.

Samruk-Kazyna has not disclosed financial terms of the deal that Astana is understood to have pushed on private shareholders of GPC Investment after the project stalled in 2022.

Completion of the deal has coincided with the resignation of the project’s executive director Marat Yeschanov who was appointed to the post in August last year, according to the founder of Kazakh oil industry magazine Petroleum Oleg Chervinsky.

GPC Investment owns a processing facility that is under construction in western Kazakhstan. Once operational, the plant will process up to 1 billion cubic metres per annum of associated sour gas into marketable hydrocarbons.

However, construction of the facility is currently being managed by Kazakh state-run gas pipeline operator and gas producer Qazaqgaz, which the authorities had appointed to step up the pace of the project.

Kashagan operator North Caspian Operating Company (NCOC) said that once this gas can be evacuated to the new plant, it will be in position to boost production at its offshore facilities in the Caspian Sea by about 25,000 barrels per day of oil.

Italy’ Eni leads the NCOC venture, which also includes supermajors ExxonMobil, Shell and TotalEnergies, alongside China National Petroleum Corporation, Inpex and Kazakh state player KazMunayGaz as partners.

Production at Kashagan is partially constrained by the gradually increasing share of associated gas in the flow of hydrocarbons to the surface, with the operator having to reinject produced gas into the reservoir.

Astana has been pushing its oil and gas operators to quickly ramp up their production in anticipation of a possible decline in the global demand for hydrocarbons after 2030 as the result of the energy transition.

Speaking at an industry event in Astana on Wednesday, KazMunayGaz executive chairman Magzum Mirzagaliyev warned that existing and future oil projects with shorter development and payback time should thus be given priority.

The country’s Energy Ministry said that it is targeting 7% growth in the country’s oil production to almost 2 million bpd this year against 2023, with the incremental output being exported to international markets because of the sluggish domestic oil demand.

The founder of Kazakh industry social network channel Nurlan Zhumagulov has described the target as “challenging” because of the expected temporary decline of output at country’s leading Tengiz project ahead of commissioning its new production facilities, and the planned maintenance at Kashagan later this year.