Kazakhstan should not cut oil production, expert says

NUR-SULTAN, Kazakhstan – For the largest oil producer in Central Asia – Kazakhstan – it is not profitable to reduce the achieved oil production by 90 million tonnes of oil per year, an expert on Caspian oil and gas projects, Igor Ivakhnenko, has said.
“In relation to Kazakhstan, we can say that neither Tengizchevroil nor the North Caspian Consortium (NCOC, which is developing the Kashagan field), Karachaganak Petroleum Operating (Karachaganak field) will reduce oil production, like other international companies operating in Kazakhstan,” Ivakhnenko told New Europe in an interview on 17 March. He opined that if Kazakhstan would support the restriction of production, then the whole burden of the reduction would fall on Kazakhstan’s national oil and gas company KazMunayGas. “For Kazakhstan and its oil industry, this would have much worse consequences than the current price reduction,” he added.
“A game to lower oil prices is impossible for a long time, since the world oil market is too large,” Ivakhnenko said.
According to Kazakhstan’s Energy Ministry, the total volume of oil production in Kazakhstan in 2019 amounted to 90.4 million tonnes and in 2018 – 90.36 million tonnes. The three largest fields in Kazakhstan – Tengiz, Kashagan and Karachaganak contribute one third of the total volume of oil produced in Kazakhstan. The country’s oil and gas industry is at a critical level due to the current low oil and gas prices – approximately at $30 per barrel. Moreover, almost half of the country’s budget comes from oil and gas revenues.