Oil production and export in Kazakhstan

Main article: Economy of Kazakhstan

Reserves and fields

2025: 12th in the world in terms of oil reserves

Oil reserves in countries of the world (billion barrels), according to Bloomberg as of February 2025:

Venezuela: 303.8

Saudi Arabia: 258.6

Iran: 208.6

Canada: 170.3

Iraq: 145

Kuwait: 101.5

UAE: 97.8

Russia: 80

Libya: 48.3

UNITED STATES: 47.1

Nigeria: 36.8

Kazakhstan: 30

China: 26

Qatar: 25.2

Brazil: 12.7

The Tengiz field, operated by the American Chevron, is part of a trio of super-giant oil fields in Kazakhstan in 2024, which include Karachaganak and Kashagan.

State-owned KazMunayGas, as well as Chinese, Russian and Kazakh private companies, operate other, much smaller fields with higher production costs.

Chronicle

2025: Kazakhstan's oil production exceeds OPEC + quotas

OPEC + oil production rose sharply in February 2025 as Kazakhstan broke the quota again.

The Minister of Energy of Kazakhstan said on March 7, 2025, that oil production in Kazakhstan exceeds OPEC + quotas. Kazakhstan has set a task for large oil companies to reduce oil production. Kazakhstan plans to optimize oil production in March.

2024: OPEC + quotas hold back Chevron production at Kazakhstan's largest Tengiz field

Every few years, the OPEC + cartel faces a recurring challenge: One of its members has spent a lot of money on new fields and is eager to turn that investment into barrels of oil. In the early 2000s, such an impatient member wishing to increase production was Algeria, in the 2010s - Iraq. Later, the United Arab Emirates acted in this role. It is expected that in 2025 it will be Kazakhstan.

For eight years after joining OPEC +, Kazakhstan has been a difficult partner for the cartel, most often mining more than its quota. The problem will increase in 2025, when a $45 billion project to expand the country's largest oil field is ready.

If pumping is allowed at full capacity, then the expansion of the Tengiz field, which has been under work for almost a decade, will produce about 260,000 barrels per day since mid-2025. That's not much, but it's about a quarter of the expected growth in global oil demand in 2025. This expansion, along with higher-than-expected production volumes at the field's existing facilities, will allow Kazakhstan to raise oil production, including light oil called condensate, to a record high of more than 2 million barrels per day in 2025.

The Central Asian country hoped that by the time the Tengiz field was commissioned, its quota would be slightly higher, which would give it the opportunity to increase production without breaking the limits too clearly. Back in June, OPEC + approved a plan to slowly increase quotas during the last months of 2024, and then in 2025. Monthly increases were due to begin in September, but falling oil prices forced them to be delayed until January.

Brent crude is trading around $75 a barrel at the time despite significant tensions in the Middle East, including Iranian and Israeli bombings.

If Kazakhstan adheres to OPEC + production limits, it will not be able to extract additional oil, despite significant investments, or the country will have to reduce production in other countries to compensate for the increase in production in Tengiz. If guided exclusively by economic considerations, Kazakhstan would do just that, since Tengiz has the lowest production cost and therefore is very beneficial for the government and American Chevron, Bloomberg wrote.

In the past, the government has instructed KazMunayGas to cut production at these fields, where prices above $50 per barrel are often required to make a profit.

Alternatively, Kazakhstan may ignore the restrictions set by OPEC +, joining the UAE and Iraq, which will extract significantly more quotas set by the cartel. The country has already done so in recent months, leading to tense conflicts with the cartel, including a trip by the cartel's secretary general, Haitam al-Ghais, to the capital Astana to meet with the country's leadership in August 2024. A further increase in production would only exacerbate the problem.

The main thing is how long OPEC + will postpone the increase in quotas. Chevron recently assured investors that the expansion of Tengiz will begin pumping in the first half of 2025, setting a deadline for new oil at the end of June. If you read between the lines, it turns out that Chevron is trying to understate promises and overestimate the results, so barrels may arrive earlier. If the company simply announces a three-month delay, until the end of the first quarter, this will not cause Kazakhstan any particular problems. But if the production increase is delayed until the second quarter, as many in the oil market expect, it could put the Asian country and OPEC + on a collision course.

Such confrontations led to serious civil strife within the group. For example, in 2021, the UAE blocked the OPEC + deal for several days after a clash with Saudi Arabia over quotas. Although Riyadh won the battle at that point, it eventually lost the war, allowing Abu Dhabi to secure significant quota concessions in the months that followed. And when the cartel tried to cut Angola's quota in 2023, the country fought back and eventually left the group. The risk is that Kazakhstan will follow suit.

2023

Kazakhstan doubled oil exports bypassing Russian ports to 3.73 million tons in a year

Supplies of Kazakh oil and gas condensate bypassing Russian ports in 2023 reached 3.73 million tons against 1.91 million tons a year earlier. This became known in early February 2024.

As Kommersant writes with reference to Reuters, which, in turn, cites data from its sources, in 2023 oil supplies from the port of Aktau towards Azerbaijan increased to 1.5 million tons from 0.3 million tons in 2022. Export through the Baku-Tbilisi-Ceyhan oil pipeline (BTC) increased to 1.4 million tons. The main suppliers of raw materials on this route are Tengizchevroil (72%), Total & Dunga (18%), Zhaikmunai (5%) and Buzachi Neft (4%).

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Фото: Pexels

The volume of exports along the Trans-Caspian route, according to the agency, reached 1.55 million tons in 2023. The Trans-Caspian route runs through China, Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey and European countries. On February 5, 2024, the press service of the Government of Kazakhstan announced that within two years the republic plans to increase the volume of oil supplies along the Trans-Caspian route to 3 million tons.

By February 2024, the main way for the export of Kazakhstani raw materials is through the Russian port of Novorossiysk by the capacity of the Caspian Pipeline Consortium (CPC). About 80% of all Kazakhstani oil exports go through it. Last year, Kazakhstan supplied 56 million tons of oil along this route. In 2024, the republic plans to increase exports through the CPC to 63.7 million tons.

At the same time, Kazakhstan is looking for alternative routes for transporting its oil to Europe, since the CPC remains an unstable option due to weather and political conditions. In January 2024, due to storm conditions in Novorossiysk, CPC stopped transshipment of Kazakh oil.^[1]

Kazakhstan sues world's largest oil companies that violated tender terms

And in April 2023, Kazakhstan sued the largest oil companies in the world, which violated the terms of the tender and did not complete the work in full.

Partners in the projects Shell, Exxon Mobil, Eni and TotalEnergies are also accused of unauthorized expenses in the amount of $13 billion in Kashagan and $3.5 billion in Karachaganak, sources say. Kashagan partners also face a fine of $5.1 billion for violating environmental standards.

In addition to generating more revenue from the sale of oil through arbitration, the Government of Kazakhstan intends to change the system of tenders used by oil enterprises in order to make this process more efficient for the national economy, including by increasing the revenues of local companies.

Attempts to increase supplies to the EU through the Druzhba pipeline

Kazakhstan [1] is struggling to find enough crude oil to meet European countries' requests for supplies through Russia's Druzhba pipeline system, which would allow them to scale back their deals with Russia amid the conflict in Ukraine.

According to the state-owned oil pipeline operator KazTransOil, Germany should receive a total of only 40,000 tons of Kazakh oil in the first quarter. This is almost 90% less than originally planned.

Oil producers can make higher profits on other export routes. Deliveries through Russia will depend on further goodwill. Moscow

2022

Kazakhstan reduced annual oil production by 2%. US and Europe control 48% of production

Oil production in Kazakhstan in 2022 reached 84.1 million tons, which is 2% less than a year earlier.

This is evidenced by data from the British Energy Institute, which were released at the end of June 2023.

According to the study, by the end of 2022, Kazakhstan accounted for 1.9% of the global oil production. Gas production in Kazakhstan in 2022 fell by 2.8% to 26 billion cubic meters (0.6% of global production). Gas consumption in the country in 2022 increased by 0.4%, to 21.7 billion cubic meters.

Kazakhstan reduced annual oil production by 2%, gas - by 2.8%

In January 2023, the Minister of Energy of Kazakhstan Bolat Akchulakov said that the volume of oil production in the country in 2022 amounted to 84.2 million tons, which is 1.9% less than a year ago. Gas production decreased to 53.3 billion cubic meters. The indicator decreased by 1%, exports amounted to 4.6 billion cubic meters. In addition, the production of other minerals decreased by 7.6%, Akchulakov reported.^[2]

Kazakhstan increased oil exports bypassing Russia by 64%

At the end of 2022, Kazakhstan supplied 1.8 million tons of oil (an average of 36 thousand barrels) bypassing Russia, which is 638 thousand tons more (64%) than a year earlier. Such data in early February 2023 is quoted by Reuters, citing its own calculations.

On routes bypassing Russia, 1.26 million tons of Kazakh oil were delivered to China, 214 thousand tons were sent through the Georgian port of Batumi, 141 thousand tons - to an oil refinery in Baku, 109 thousand tons - to the Baku-Tbilisi-Ceyhan pipeline and 80 thousand tons - to Uzbekistan.

Reuters calculations confirm the data of the macroeconomic review of Kazakhstan, prepared by the Center for Applied Economics Research (AERC). Kazakhstan in 2022 sent 1.7% less oil to the Caspian Pipeline Consortium (CPC) than a year earlier, the document says. In total, Kazakhstan exported 64.8 million tons of oil last year, of which the CPC accounted for 81.2%.

At the end of December 2022, it became known that the Kazakh national energy company KazMunayGas (KMG) was going to replace Russian oil in Germany. A batch of 20 thousand tons of oil will be sent in the first half of February. Europe's embargo on the purchase of Russian oil, which entered into force on December 5, does not apply to pipeline supplies under Druzhba, but many countries have promised to abandon them on their own in 2023. Germany, in particular, pledged to stop importing Russian raw materials through the oil pipeline by December 31, 2023.

Batumi is an alternative direction (to Russian ports), while the economy does not play a role, a Reuters source explains.

American Ambassador to Astana Daniel Rosenblum said that the United States promised to support the authorities of Kazakhstan and help find alternative ways to export oil.^[3]

2021

Oil production in thousands of barrels per day by country in 2021

2017

Kazakhstan is one of the largest oil-producing countries in the world. As of August 2017, the country ranks 17th in the world in terms of production.

There are more than 200 oil fields in Kazakhstan. According to the annual report of BritishPetroleum at the end of 2015, proven oil reserves in the country amounted to 30 billion barrels. According to this indicator, the country ranks 12th in the world.

The forecast reserves are estimated by experts at 11-12 billion tons, most of which lies in the bowels of the three largest deposits:

• Tengiza (5-6 billion tons),
• Karachaganaka (1.2 billion tons) and
• offshore Kashagan (3 billion tons).

By 2017, over a quarter of a century of independent development, Kazakhstan managed not only to overcome a slight decline in oil production in the mid-1990s, but also to increase its volumes more than threefold compared to 1992. For the development of the largest fields, consortia were created with the participation of foreign companies on PSA terms. National and foreign companies now produce about 80 million tons of oil and gas condensate annually.

The main oil producers of Kazakhstan:

• NK Kazmunaigas,
• Tengizchevroil,
• CNPC-Aktübemunaigas,
• Karachaganak Petroleum Operating,
• Rosneft and others.

Kazakhstan signed an agreement with OPEC to reduce production in 2017 by 20 thousand barrels per day, which per year is about 1 million tons.

2016: Kazakhstan joins OPEC +

Kazakhstan joined OPEC in 2016, when the oil cartel formed an alliance with several other major oil producers and the expanded group was named OPEC +.

Notes