Kazakhstan Will Not Reduce Oil Production For Account Of Kashagan, Tengiz And Karachaganak

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Kazakhstan plans to cut oil production by 20,000 tons within the agreement reached between OPEC and Non-OPEC countries on Dec.10, said Kanat Bozumbayev, Minister of Energy of Kazakhstan.

“Yes, we will cut it. By 20 000 barrels a day,” TASS cites K. Bozumbayev. He added Kazakhstan will lower production in comparison to November 2016.

“Our partners realize we cannot seriously cut the production as we have commenced production on the new fields. We will find other reserves to lower the production in Kazakhstan by 20 000 in comparison to November. In November it was 1.7 mln barrels a day,” said the Minister.

He said Kazakhstan estimates it as a signal for the market. “We have assumed the obligation to lower it since January,” he added.

He said it was hard for Kazakhstan to take the decision due to recent introduction of Kashagan field and completion of Tengiz and Karachaganak expansion projects.

“It was hard to lower the production as we introduced the giant field Kashagan a couple of months ago, and we completed repair works at big oil fields- Tengiz and Karachaganak. We proposed freezing, but by the request of our Russian and Saudi colleagues we have found the reserves to cut the production by 20 000 barrels,” he said.

The ministry noted that oil production will be reduced at some oil fields in Aktobe, Kyzylorda and Mangystau regions.

“Reduction will not affect such major projects as the North-Caspian project (Kashagan), Tengiz and Karachaganak,” the ministry said.

Oil production will be reduced from November level when Kazakh Kashagan field has reached a commercial production level and the country increased output to 1.7 million barrels. Hence oil output in Kazakhstan will be reduced to 1.68 million bpd.

On Saturday Dec. 10 OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. Non-oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 bpd starting from Jan. 1, 2017 for six months, extendable for another six months, to take into account prevailing market conditions and prospects.

Earlier OPEC agreed to slash the output by 1.2 million barrels per day from Jan. 1, with top exporter Saudi Arabia cutting as much as 486,000 bpd.