Record 90.3 million tonsof hydrocarbons were produced in Kazakhstan in 2018. Although, according to the plans of the Ministry of Energy of the Republic of Kazakhstan, this year the production output will drop to 89 million tons, the country remains one of the largest oil producing countries in the world.
According to the Information and Analytical Center of Oil and Gas JSC (IACOG), the country is in the world’stop 20 largest oil-producing countries today.
So, according to BP for 2019, recoverable oil reserves in Kazakhstan are 3.9 billion barrels, or 1.9% of global reserves. In 2018, the country accounted for 2% of global oil production, thus taking 13th place in the world.
According to IACOG, in June 2019, oil production in Kazakhstan amounted to 7.8 million tons, or 1.96 million barrels per day. Global oil productionin June this year, according to Thomson Reuters, amounted to 101.3 million barrels per day. Thus, at the end of the first half of 2019, Kazakhstan accounted for 1.9% of the world’s oil production. Among the CIS countries, Kazakhstan takes the second place following Russia, producing 11.4 million barrels per day in 2018 and 11.15 million barrels per day in June 2019.
According to the IACOG, in 2018, the largest oil producer was the USA with 16% of the total oil produced in the world, followed by Saudi Arabia with 13%. The third place was taken by Russia with 12%, followed by Canada that produced 6% of world production, Iran with 5%, Iraq with 5%, the UAE with 4%, China with 4%, Kuwait with 3%, Brazil with 3%, Mexico, Nigeria and Kazakhstan with 2% each, and other countries with 23%.
As of June 2019, the overall situation in oil production was as follows: USA – 19% of world oil production, Kazakhstan – 2%, Libya – 1%, Venezuela – 1%, Iran – 2%, OPEC – 26%. That is, these are 11 countries included in the cartel, except Iran, Venezuela and Libya, exempted from the deal to reduce production. Other OPEC + members account for 16% of world oil production, and other countries – 33%.
As IACOG explains, today Kazakhstan has a number of obligations under the OPEC + Agreement. At the end of 2018, the republic signed an agreement to reduce OPEC + oil production.
The country agreed to reduce oil and gas condensate production by 40.0 thousand barrels per day from 1,900 thousand bpd (November 2018 level) to 1,860 thousand bpd.
In early July of this year, OPEC + countries decided to extend the terms of the agreement for another 9 months until March 31, 2020.
According to the results of the first half of 2019, the average oil and gas condensate production in Kazakhstan amounted to 44.2 million tons, or 1,857.8 thousand bpd, which is 2.2 thousand bpd lower than the level required by the agreement.
“One of the key factors in Kazakhstan’s compliance with the requirements of the Agreement was the reduction in production by three largest oil companies in the country due to the repair work carried out at their production facilities,” IACOG analysts say.
At the same time, North Caspian Operating Company N.V. (NCOC)significantly reduced production. According to IACOG, the consortium reduced production to 0 tons in mid-April from 42.5 thousand tons (average daily production in February) and began commissioning a month later in May. The company began preparing for the suspension of production back in March of this year.
Repairs were also carried out at the second generation plant of Tengizchevroil LLP (TCO)for 10 days in April, during which the company produced on average 26.7% less oil and gas condensate. During the 10 days of April this year, oil production at Karachaganak Petroleum Operating B.V. (KPO) was reduced by 2.6%.
As a result, oil production in Kazakhstan in April significantly decreased to 6.5 million tons, or 1,657.0 thousand bpd, which is 15.4% less than in March of the current year and 12.5% less than in April 2018.
According to the analytical center, after the completion of repair work at three large oil and gas producing companies, the average daily oil and gas condensate production in Kazakhstan in June reached 258.4 thousand tons per day, or 7.8 million tons per month.
It should be noted that according to the Ministry of Energy, 97 companies are engaged in oil production in Kazakhstan. At the end of 2018, TCO became the largest oil producer with over 28.6 million tons, followed by NCOC with 13.2 million tons and KPO with more than 12.1 tons of oil.
According to the Association of oil service companies of Kazakhstan(KazService), last year Kazakhstan exported about 70 million tons of oil, which is estimated at $37.8 billion. The oil industry brought about 4.5 trillion tenge of revenue to the state treasury.