Located in the Uralsk Region of West Kazakhstan, it was discovered in 1979 by a well drilled to investigate a structural high detected during a reinterpretation of 2D seismic shot between 1970 and 1971. Production began in 1984 under the operatorship of Karachaganakgazprom. Limited quantities of gas and condensate were exported to Russia via pipelines and to the processing facilities at Orenburg. On 3 October 2006, Kazakhstan and Russia signed an agreement to create a joint venture on the basis of Orenburg gas processing plant for processing gas from the Karachaganak field.
The phase began with three wells penetrating into the Permian formations of the reservoir. Once produced to surface the gas and oil were separated before being piped to Orenburg where further processing was undertaken. This was partially due to the sour nature of the gas, with a hydrogen sulphide content of 3.5-5.0% and carbon dioxide content of 5%. Karachaganckgazprom also maintained a policy of full gas voidage replacement to maintain pressure of the reservoir above the dew point. By 1990, approximately 200 vertical wells had been drilled in Karachaganak reaching a peak production plateau of 425 million cubic feet (12.0 million cubic metres) per day of gas and 100,000 barrels per day (16,000 m3/d) of oil, before beginning to decline in 1992.
Beginning in 2000 under the operatorship of Karachaganak Petroleum Operating (KPO), the field went under a redevelopment program. This involved an investment of over US$1 billion into the construction and enhancement of existing facilities, new gas and liquid processing and gas injection facilities, a workover program consisting of 100 existing wells, a 120 MW power station for the facilities, and connection to the Caspian Pipeline Consortium via a 650-kilometre (400 mi) line to Atyrau. This phase was officially completed in 2004, allowing for the production handling of 700 million cubic feet (20×106 m3) per day of gas and 200,000 barrels per day (32,000 m3/d) of oil.