Recent amendments to Kazakhstan’s Subsoil Code have given formal shape to the idea of designating so-called underexplored areas, where subsoil use rights could be granted under simplified conditions. The concept itself is not controversial: territories that are objectively complex, high-risk and poorly studied may justify more flexible terms for investors. However, experts say the success of the reform will depend on how “underexplored” is defined in practice.
Industry specialists warn that relying on a purely formal or simplified definition risks creating new disputes, allegations of lobbying and inefficient decisions. Geological knowledge alone is not sufficient to determine the true level of exploration. Instead, the degree of exploration should be assessed through a combination of factors, including drilling history, certainty of petroleum systems, presence or absence of proven reserves, technological readiness, market interest and auction results.
Kazakhstan offers clear examples of why a narrow approach can be misleading. Parts of the Pre-Caspian Basin are formally considered well explored, yet large areas have seen little or no modern exploration activity since Soviet times. Conversely, the Chu-Sarysu Basin is sometimes labelled underexplored, despite hosting multiple discovered and producing gas fields and attracting strong investor interest at recent auctions.
Experts argue that underexploration should be understood as a lack of sufficient certainty to justify a reliable forecast of commercial reserves, rather than the absence of individual geological surveys. Even areas covered by seismic data may remain underexplored if drilling has not reached target horizons or failed to confirm industrial-scale hydrocarbons.
The issue becomes more complex when considering unconventional resources such as coalbed methane and shale hydrocarbons. Although legally classified as hydrocarbons, these resources often remain underexplored due to the absence of proven technologies, economic models and successful commercial examples. Coal basins like Karaganda are well studied for coal mining, but industrial production of coalbed methane has yet to be established, making such resources effectively underexplored from an oil and gas perspective.
Market behaviour is another critical indicator. Areas repeatedly offered at auctions without attracting bidders signal high risk and low certainty, while strong investor demand suggests that simplified access mechanisms may be inappropriate. Ignoring these signals could undermine fair competition.
To reduce subjectivity, analysts propose an integrated scoring system that combines geological data, drilling results, technological readiness and market activity. Such a framework would allow regulators to justify decisions transparently, strengthen investor confidence and reduce legal and reputational risks. A clear, well-defined methodology, experts conclude, could become one of the most effective elements of Kazakhstan’s subsoil use reform, benefiting the state, investors and regulators alike.
