Kazakhstan’s widely publicised share offering for KazMunayGaz, the country’s fourth-largest oil producer and pipeline operator, has drawn a lukewarm response with just under 129,000 people submitting bids.

Kazakhs were given an extended deadline to file their applications for shares, ahead of orders from domestic and foreign institutional investors.

Authorities had hoped to sell 5% of KazMunayGaz shares, while reserving an option to increase the volume to as much as 15%.

However, despite a strong promotion for the KazMunayGaz offering in Kazakh media and social networks, only about 3% of the shares were sold, according to country’s state investment fund Samruk-Kazyna, which holds the stock on behalf of the government.

Kazakh nationals have committed to pay 74.6 billion tenge ($158 million, or about $1200 on average for each individual bid) for shares in KazMunayGaz, amounting to a total stake of less than 1.5%.

The country’s institutional investors, including banks and brokerage houses, will also hold less than 1.5% after promising to pay about 72.7 billion tenge, while foreign investors generally stayed away from the offering, submitting bids totalling about 6.6 billion tenge.

Local observers had suggested that political, rather than economic, motives lay behind the offering, with the announcement of the placement coming shortly before Kazakhstan’s presidential elections at the end of November.

Incumbent President Kassym-Jomart Tokayev had promised to take steps towards sharing the country’s hydrocarbon wealth with the population, after having to call in foreign — mostly Russian — troops in January to help dispel mass protests over high inflation and years of economic stagnation.

Nurlan Zhumagulov, executive director of Kazakhstan’s non-governmental organisation Energy Monitor, which oversees the country’s energy sector, told Kazakh independent news outlet Ratel that KazMunayGaz’s outlook and development options were influenced too heavily by government demands.

He said that, while the company may achieve some short-term upside in revenues and field development projects, investors should be careful not to miss an opportunity to sell KazMunayGaz stock.

Kazakhstan’s core stock exchange, Kaze, is set to start the first market trades in KazMunayGaz on 8 December.

According to Samruk-Kazyna, Kazakh authorities are continuing to plan more share offerings for large state-run corporations, with a public stock placement for gas pipeline operator Qazaqgaz scheduled for sometime between 2024 and 2025.

Authorities recently approved Qazaqgaz' plans to become a major gas producer as well as a gas pipeline operator.