Kazakhstan Disappoints on OPEC Promise
Mixed reporting casts doubt on how seriously Astana takes its oil production cut promises.
For months, it’s been something of an open secret that Kazakhstan’s 2016 commitment to cap its oil production, pledged alongside OPEC and non-OPEC members alike, was worth little more than the paper on which it was written. Where other pledgees — such as Saudi Arabia, Kuwait, and even Venezuela — have met their commitments to drop production, Kazakhstan decided that it would actually increase its output in the interim, assurances otherwise be damned.
Thanks in part to the restart of its Kashagan oil field, Kazakhstan was one of a handful of countries that actually expanded its total barrel-per-day output. Such a fact was not lost on regional analysts. As The Diplomat’s Catherine Putz wrote just a few months ago, Astana “has been one of the worst violators” of those who’d signed the pact. Added EurasiaNet’s Aktan Rysaliev, Kazakhstan “had begun breaking their word as soon as they had uttered it.”
These findings were backed by a March report from the International Energy Agency, which pointed out that Kazakhstan, alongside Sudan and South Sudan, “offset reductions elsewhere.” All told, the IEA calculated that Kazakhstan was some -199 percent compliant with its prior pledge during the January survey. Small wonder that Kazakh Energy Minister Kanat Bozumbayev had already described Astana’s promises as symbolic.
Now, it appears Kazakhstan may be pulling back from its commitments wholesale. A TASS report earlier this week said that Bozumbayev announced a potential pullback from its pledge, looking for a smooth exit from the cap. In his follow-up report, Rysaliev noted that Kazakhstan’s transition away will likely “take place gradually,” according to Bozumbayev, and that Kazakhstan’s current output projections may well be surpassed as the year progresses. Bozumbayev, hewing to Astana’s line, repeated after the TASS story took off that Kazakhstan nonetheless remained committed to its 2016 pledge, which will theoretically run through April of next year.
Whatever Kazakhstan decides, its OPEC-related cap commitments disappointed more than a few fellow signees. But such disappointment still isn’t enough to bring Astana in line with promises, especially as Kazakhstan looks forward to the one-year anniversary of Kashagan finally ramping up the production for which many have hoped.
By Casey Michel
This article was originally published on The Diplomat. Read the original article.