Kazakhstan eyes entering top-10 for oil production

/By Azernews/

By Aynur Karimova

Energy-rich Kazakhstan, which enjoys 30 billion barrels of proved crude oil reserves (as of January 2014, according to the Oil & Gas Journal), expects to enter the top 10 oil exporters by 2020 through producing 130 million tons of oil per year.

This was announced by Askar Kenzhekhanov, the Deputy Director General of the Information Oil and Gas Center of Kazakhstan's Energy Ministry at the SOCAR International Practical Conference on "Caspian Basin and Central Asia: Trade, Logistics, Oil Processing and Oil and Chemistry" in Baku on April 26.

He said Kazakhstan plans to produce 77 million tons of oil in 2016, adding that in 2015, there was a slowdown in oil production in Kazakhstan amid falling world price.

"In 2015, some 79.4 million tons of oil was produced in Kazakhstan, which is 0.5 percent more than the forecasted figures," he noted. "Gas production amounted to 45.3 billion cubic meters, which is 7 percent more than the forecasted figures, as well as 5 percent higher than in 2014. The forecast for production in 2016 amounts to 77 million tons of oil."

Kenzhekhanov further added that Kazakhstan is working to differentiate the oil supply chains and expects production growth after the production is resumed at the Kashagan field.

"It will contribute to the growth of export," he stressed.

Kazakhstan, being the second largest endowment in Eurasia after Russia, and the twelfth largest in the world, just behind the U.S., exported 60.9 million tons of oil in 2015, which accounts for 76.7 percent of the total production given the planned export volume of 65 million tons.

The largest volume of oil - 38 million tons was exported via the Caspian Pipeline Consortium, 12.4 million tons of oil - via the Atyrau-Samara pipeline, and 4.8 million tons in the Chinese direction.

Export by sea totaled 3.1 million tons, while 0.8 million tons of oil was exported by rail. A significant reduction in export by rail is due to the rising cost of oil transportation.

In 2016, Kazakhstan plans to sell 74 million tons of oil versus 80 million tons sold in 2015.

Earlier, the then Energy Minister, Vladimir Shkolnik said that the Kazakh government plans to compensate the projected decline in oil production in 2016 by commissioning the Kashagan field in the future.

The government was also instructed by President Nursultan Nazarbayev to implement all perspective projects in the energy sector, including the commissioning of Kashagan field, the project for expanding the Tengiz field, and the second phase of expanding the Karachaganak project.

Tengiz, Karachaganak and Kashagan are Kazakhstan’s largest oil fields.

Karachaganak field is one of the world's largest fields. Its oil and condensate reserves stand at 1.2 billion tons, and gas reserves exceed 1.35 trillion cubic meters. As of today, almost 45 percent of gas and 16 percent of all liquid hydrocarbons produced in Kazakhstan are being extracted from this field.

The Tengiz field in the west of Kazakhstan is one of the deepest and largest oil fields in the world. Total estimated reserves amount to three billion tons (26 billion barrels).

Another large Kazakh oil and gas field is Kashagan, which is located in the north of the Caspian Sea. Oil production at Kashagan started in September 2013, but its operation was suspended after a gas leak appeared from the ground pipeline stretching from the Island D to the Bolashak plant.