Kazakhstan is aiming to increase crude and gas condensate production by nearly 25% to 2.155 million barrels per day by 2025, according to the country’s development strategy released on February 20th.
• The Kashagan oil field and Tengiz project are key to achieving this increase
• A revamp of refining facilities will take place, changes to export tax will also be introduced
• This strategy is based on Brent crude oil trading at $55 dollars a barrel
The mid-term increases in output will be underpinned by the development of the giant Kashagan oil field in the Caspian Sea and the future expansion of the Tengiz project, according to the strategy, which was posted on the government’s official website.
The output forecast assumes a Brent crude oil price of $55/barrel, according to the document which was approved by President Nursultan Nazarbayev.
The country’s production amounted to 86.2 million mt, or around 1.731 million barrels a day in 2017, up 10.5% year on year, mainly due to a rise in production at Kashagan.
Kazakhstan’s output is on the rise despite its commitments to reduce the output by 20,000 barrels a day from November 2016 levels of 1.8 million barrels a day under the OPEC /non-OPEC reduced production deal.
Kashagan was re-launched just three months before the agreement came into force in January 2017, after years of delays and major cost overruns.
The increase in production is set to continue in 2018 as production at Kashagan is expected to grow to 370,000 barrels a day by the middle of 2018, up from around 250,000 barrels a day at the end of 2017, the energy ministry said earlier.
The Chevron-led Tengiz project, one of the three key production fields in Kazakhstan, is expected to increase production by 260,000 barrels a day by 2022, from around 562,300 barrels a day in 2017, through implementation of the expansion phase approved by the project’s shareholders in 2016.
In late 2017, the government reconsidered its upstream legislation to boost exploration work in the country, improving the economic potential of new reserves, in a move that has already sparked interest from potential investors.