Kazakhstan cuts oil output amid overhaul at Tengiz
Kazakhstan’s crude oil production in August decreased to 1.45 million barrels per day (b/d) from 1.565 million b/d in July, a 115,000 b/d decline, according to the Organization of the Petroleum Exporting Countries (OPEC) oil market report for September.
In July, production saw a minimal decline and in June, the country produced 1.579 million b/d.
In the fourth quarter (Q4) of 2023, Kazakhstan’s oil production was 1.606 million b/d. For Q1 2024, it was 1.614 million b/d and in Q2 2024, it was 1.555 million b/d. The average output in 2023 was 1.597 million b/d, compared to 1.489 million b/d in 2022.
According to the latest data from the Organization for Economic Cooperation and Development (OECD), which includes developed countries, Europe’s crude oil imports declined in May, falling 3% month-on-month (MoM) to 8.6 million b/d. The largest supplier of oil to Europe was the United States, with 1.8 million b/d, followed by Kazakhstan with 1.1 million b/d. Saudi Arabia ranked third with less than 0.9 million b/d.
Total oil exports from Russia and Central Asian countries averaged about 6.4 million b/d in July, down 0.1 million b/d, or nearly 2%, from the volumes delivered in June. The MoM drop in exports was primarily due to a reduction in shipments through Baltic and Black Sea ports. This was partially offset by higher volumes of oil pumped through pipelines.
Notably, in July, deliveries through the Druzhba pipeline increased by 65% or 113,000 b/d, to 288,000 b/d MoM. However, this volume is 4% lower year-on-year (YoY). Oil exports from Central Asia averaged 237,000 b/d in July, which is 8% higher YoY but 2% lower compared to the same month in 2023.
Total exports from the Black Sea region through the Caspian Pipeline Consortium (CPC) terminal rose by 2% or 31,000 b/d, to nearly 1.5 million b/d in July. This represents a 6% increase or more than 80,000 b/d, compared to the same month in 2023.
In early September, the Tengiz field completed scheduled repairs on two of the five process lines at the Complex Technology Line-KTL plant, according to a release from Tengizchevroil (TCO). The overhaul, as previously reported by the Ministry of Energy, would help reduce Kazakhstan’s production as part of its OPEC commitments.
In late August, the OPEC Secretariat announced that Kazakhstan had updated its compensation plan for overproduced oil volumes for the first seven months of 2024 as part of its commitments under the OPEC+ agreement. The revised plan indicates that cumulative production will be reduced by 699,000 b/d, an increase from the previously announced 620,000 b/d. Iraq has also submitted an updated plan.
Over the next 14 months, extending through September 2025, Kazakhstan will compensate for 12.7% more oil than initially stated in July 2024. Iraq, meanwhile, has committed to compensating 1.44 million b/d, up from the previous 1.184 million.
