Eni’s Kazakh subsidiary kicks off oil delivery to Germany

The third company to supply oil to Germany via the Druzhba pipeline / Collage by Kursiv.media, photo editor: Aruzhan Makhsotova

Kazakhstan’s Agip Caspian Sea, a subsidiary of the Italian Eni, has started supplying oil to Germany via the Druzhba pipeline, which stretches through Russia, the Russian Vedomosti newspaper reported. In June, the company delivered 20,000 tons of oil to Germany, becoming the third Kazakhstani company to transport oil to Europe by this route. In turn, the Ministry of Energy of Kazakhstan said that these shipments would continue if the project proved to be economically viable.

«In June 2024, Agip Caspian Sea delivered 20,000 tons of oil in a test mode via the Atyrau-Samara and the Druzhba trunk pipelines. Future transportation of oil by this route will depend on the economic feasibility of the project,» the ministry explained.

Nurlan Zhumagulov, head of the Energy Monitor fund, highlighted the advantage of the Druzhba pipeline:

“Druzhba is now cheaper than the CPC [Caspian Pipeline Consortium] and oil from this pipeline is being traded at a premium to Brent.”

The CPC pipeline accounted for 80% of Kazakhstan’s oil exports last year. Both Agip Caspian Sea and Inpex North Caspian Sea, a subsidiary of Japan’s Inpex, have shipped oil from the Kashagan field to Germany, with the latter supplying 20,000 tons. Eni and Inpex hold 16.81% and 7.56% in the North Caspian Operating Company (NCOC), respectively, while KazMunayGas (KMG) owns 16.88%. Eni also holds a 29.5% stake in the Karachaganak project.

Karachaganak oil has been supplied to Germany via the Druzhba pipeline since 2023. Last year, 993,000 tons were delivered, with a projected volume of 1.2 million tons for 2024. According to KazTransOil, the volume of shipped oil reached 420,000 tons from early 2024 to mid-May (which adds up to a total of 1.3 million tons for the entire period).

Agip Caspian Sea exported 48,500 tons of oil through the port of Novorossiysk over the first six months of the year, surpassing 40,500 tons shipped during the same period last year. Additionally, 50,500 tons were shipped via Ust-Luga in the first half of 2023, but no deliveries have been made through that route this year.

The Ministry of Energy estimates the potential of oil exports to Germany via the Druzhba pipeline at 5 million tons per year. Even though 1.2 million tons are projected to be delivered in 2024, some experts are skeptical about a further increase in oil supply this year due to limited oil output in Kazakhstan and a lack of appealing offers from Germany.

Eni, an Italian multinational oil and gas company, operates in Africa, Russia and Kazakhstan, with Europe as its primary sales market. In 2023, Eni was ranked 61st on the Fortune Global 500.