Feb 21, 2025
Kazakhstan's oil production reaches an all-time high
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Kazakhstan's oil production has reached an all-time high despite the damage to the Caspian Pipeline Consortium (CPC), its primary export route through Russia.
As of February 19, Kazakhstan's oil and gas condensate production stood at 2.12 million barrels per day (bpd), according to official data reported by sources. This week, Russia announced that CPC's capacity was reduced by 30-40% following an attack by Ukrainian drones. It's unclear how Kazakhstan has been able to increase its output despite limited export capacity, as the country relies on CPC for over 80% of its exports.
The increase in production follows enhancements at the massive Tengiz oilfield, operated by Tengizchevroil, a consortium led by Chevron Corp., which is undertaking a $48 billion expansion project at Tengiz.
Recently, Reuters reported that Kazakhstan might significantly boost its crude oil exports through Turkey's port of Ceyhan, potentially reducing its reliance on the more than 80% of flows currently routed through Russia. Kazakhstan's Energy Minister Almasadam Satkaliyev mentioned that exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline could rise to 20 million metric tons annually from the existing 1.5 million as the nation ramps up oil production.
Nonetheless, Kazakhstan may later reduce oil production to make up for previous overproduction. Last year, Kazakhstan, Russia, and Iraq presented their compensation plans to the OPEC Secretariat concerning overproduced crude volumes for the first half of 2024. According to OPEC, the total overproduced amounts must be fully compensated over the next 15 months, up to September 2025, with Kazakhstan 'paying back' a cumulative 620 kb/d, Russia 480 kb/d, and Iraq 1,184 kb/d.
Many traders are concerned that the balance of oil demand growth against non-OPEC+ supply growth may not balance out with the restored output from OPEC+, leading to an oversupplied oil market when OPEC+ begins to reduce production cuts in April. Yet, commodity analysts at Standard Chartered have noted that this perspective overlooks repeated reassurances from OPEC+ that any tapering would be entirely contingent on market conditions.
As of February 19, Kazakhstan's oil and gas condensate production stood at 2.12 million barrels per day (bpd), according to official data reported by sources. This week, Russia announced that CPC's capacity was reduced by 30-40% following an attack by Ukrainian drones. It's unclear how Kazakhstan has been able to increase its output despite limited export capacity, as the country relies on CPC for over 80% of its exports.
The increase in production follows enhancements at the massive Tengiz oilfield, operated by Tengizchevroil, a consortium led by Chevron Corp., which is undertaking a $48 billion expansion project at Tengiz.
Recently, Reuters reported that Kazakhstan might significantly boost its crude oil exports through Turkey's port of Ceyhan, potentially reducing its reliance on the more than 80% of flows currently routed through Russia. Kazakhstan's Energy Minister Almasadam Satkaliyev mentioned that exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline could rise to 20 million metric tons annually from the existing 1.5 million as the nation ramps up oil production.
Nonetheless, Kazakhstan may later reduce oil production to make up for previous overproduction. Last year, Kazakhstan, Russia, and Iraq presented their compensation plans to the OPEC Secretariat concerning overproduced crude volumes for the first half of 2024. According to OPEC, the total overproduced amounts must be fully compensated over the next 15 months, up to September 2025, with Kazakhstan 'paying back' a cumulative 620 kb/d, Russia 480 kb/d, and Iraq 1,184 kb/d.
Many traders are concerned that the balance of oil demand growth against non-OPEC+ supply growth may not balance out with the restored output from OPEC+, leading to an oversupplied oil market when OPEC+ begins to reduce production cuts in April. Yet, commodity analysts at Standard Chartered have noted that this perspective overlooks repeated reassurances from OPEC+ that any tapering would be entirely contingent on market conditions.