Kazakhstan authorities are moving ahead with a long awaited initial public offering to float a portion of stocks in the country’s fourth largest oil and gas producer KazMunayGaz.

The decision was announced in the Kazakh capital of Nur-Sultan on Tuesday by Almasadam Satkaliyev, executive chairman of state-run holding company Samruk-Kazyna.

According to Satkaliyev, a portion of the shares up for grabs will be offered initially to domestic investors through an IPO scheduled to take place at the Aix Astana International Exchange and the Kase Kazakhstan Stock Exchange. He did not specify the size of the offering, however.

Satkaliyev stressed that an important objective behind the flotation was to drum up interest among the general public, rather than marketing the company’s stock directly to Western institutional investors.

Kazakhstan suffered several days of unrest in early January, with protesters taking to the streets in major cities and towns to express their anger over living costs, alleged corruption and perceptions about poor transparency in the running of large state run corporations.

The Kazakh Association of Minority Shareholders offered encouragement for the flotation as an attempt to improve the distribution of oil and gas revenues among the citizens of Kazakhstan.

Public shareholdings could serve to improve public control over the operational activity of KazMunayGaz, the association said in its recent report on the proposed IPO.

Samruk-Kazyna had not replied to a inquiry from Upstream on the expected timeline and scale of the IPO at the time of writing.

The Kazakh Association of Minority Shareholders suggested that the government will allocate about 10% of KazMunayGaz stock for this purpose.

About half of these shares may be sold to the public via different outlets, including post offices, during the second half of this year.

The other half of that stock may be reserved for share-owning incentives for KazMunayGaz employees, it said.

Russian transit risks

The risks that KazMunayGaz faces in transporting its exported oil across Russia to reach international markets has hampered the company’s capacity to take advantage of high prices in recent months.

Europe and the US have imposed several packages of sanctions on Russia for its military invasion to Ukraine, with the latest round targeting country’s export oil shipments, already heavily discounted against international oil benchmarks.

Kazakh oil is blended with prevalent Russian crude in the country’s pipeline network, using the Russian ports of Novorossiysk and Ust-Luga.

Kazakh authorities have signalled that dependence on Russia as an oil transit country could be reduced by boosting throughput capacity on the Atasu-Alashankou oil trunkline to China by at least 215,000 barrels per day.

However, the project may take up to eight years and involve the construction of five additional pumping facilities and additional 455 kilometres of pipelines.