Kashagan to bring 13M tons of oil by 2020
Oil and gas sector is the major and most rapidly growing industry in Kazakhstan which brings the country a lion’s share of its incomes.
Kazakh Prime Minister Bakytzhan Sagintayev shared his forecasts about the revenues to the state treasury from oil production for the next few years, Kazinform reported.
“If we look at the forecast of revenues and how the National Fund is formed, then we need to understand what parts it is composed of. Necessarily this is the volume of production, which is growing, this is the world price of oil. Therefore, if we come to the price calculations, our forecast of tax revenues for 2017 is formed on the basis of $50 per barrel. For 2018-2020, we formed a forecast for the receipt of taxes, based on a price of $45 per barrel. That is, we already have five dollars difference, here we lose,” Sagintayev said at the plenary session of the Mazhilis of the Kazakh Parliament.
At the same time, according to the Prime Minister, the volume of oil production by 2020 should grow due to the Kashagan field.
“The volume of oil production is growing. The forecast for this year was planned at somewhere around 84.5 million tons, but it shows that there will be some increase at the end of the year. By 2020, we have an indicative forecast of over 87 million tons. At Kashagan, the production is growing. It is planned to increase the production from today’s 6 million up to 13 million by 2020,” he explained.
In the other extracting companies, the volume of production is decreasing, according to the minister.
“Based on this, we calculate that in all companies which pay to the National Fund in full, the volume falls,” he said.
For example, Kashagan, based on the PSA agreement, will pay taxes only after it reaches a real payback,” Sagintayev said.
He stressed that only the republican share will come from Kashagan.
“Although the volume of production increases, there will be less revenue in reality. In addition, next year we will complete the modernization of all three refineries. Therefore, the volume of supply to these plants from 16 million will be increased to 19 million. Naturally, here we will also lose mineral extraction tax as well as royalties on exports,” the minister said.
All these factors show us that although the oil production volumes are growing and the oil price is stabilizing, the revenues to the National Fund will decrease, according to Sagintayev.
Kazakhstan’s proven oil reserves as of early 2016 stood at 30 billion barrels, according to the BP Statistical Review of World Energy.
Tengiz, Karachaganak and Kashagan are the largest oil fields in Kazakhstan. Three oil giants will be able to bring Kazakhstan’s oil production to a new level in the coming years even if new oil fields are not discovered.
With the start of oil production at the Kashagan field, the forecasts of several international organizations on oil production in Kazakhstan immediately grew.
Analysts from the International Energy Agency (IEA), OPEC, the Energy Information Administration of the US Department of Energy (EIA) link the increase in oil production namely with the Kashagan field.
Kazakhstan’s Energy Ministry reported growth of production in 8 months of the year compared to the same period of the previous year. The Ministry reported oil production volume to be at the level of 56.9 million tons (112.2 percent compared to 2016).