While oil-producing countries are halting oil production, Kazakhstan keeps increasing it. Kanat Bozumbayev, Energy Minister of Kazakhstan, has said they increased the annual plan by 1.5millon tons to 75.5million.
The country has increased recovery with the launch of the Kashagan oil field, which KazMunayGas is developing jointly with a pool of foreign companies. After the submarine pipeline was damaged in 2013, the production was suspended and then resumed this autumn.
According to Kanat Bozumbayev, more than 1.1million tons of oil are expected to be recovered by the end of the year. At present, the daily recovery exceeds 12.5 thousand tons. Yet, the government of Kazakhstan still avoids making any growth forecasts. According to JBC consultancy, it will grow significantly and as early as next year. Analysts say, the recovery at Kashagan will grow up to 46.7 thousand tons per day annually.
That is why, perhaps, they in Astana anticipate a growth of up to 80 million tons for the next year. According to the minister, the recovery will grow to 102million tons by 2030. In his words, along with the Kashagan field, the recovery at Tengiz field will be increased starting in 2022 and the current recovery level at Karachaganak will be maintained. Besides, Astana hopes to launch new maritime fields starting 2025.
The recovery growth will require a significant enlargement of the logistic capacities for export, including construction of an oil pipeline to Azerbaijan for further transportation of oil via Baku-Tbilisi-Ceyhan pipeline. However, they in Astana say they have almost all the necessary infrastructures.
Minister Bozumbayev said Kazakhstan’s export capacity will make up 100million tons next year.
“The work carried out to diversify the oil transportation routes enabled expanding the technical capacities. At present, we are completing inspection of the designed capacity of CPC (the oil pipeline to Novorossiysk – editor’s note) that is intended to increase the capacities from 28 to 67million tons a year,” TASS quoted the minister as saying.
They in Astana hope to pump 52million tons via the Caspian Pipeline Consortium’s (CPC) pipeline as early as next year, 20million tons via the pipeline to China, 18million tons via Atyrau-Samara pipeline. The railway and maritime export capacities via Azerbaijan will be maintained at 5million tons each.
Alternative pipeline projects may remain unaddressed for long years, which will disappoint Baku that hopes to earn on the transit of the Kazakh oil. Experts avoid making untimely conclusions.
“With the recovery growth, part of the production may be transported via several pipelines at once,” says Sergey Rekeda, Director General of the Information and Analytical Center on Post-Soviet Space, at the Moscow State University. He believes that the Consortium’s companies operating on Kashagan may influence the route. For instance, Total (France), Eni (Italy) and Inpex (Japan) are still members of the BTC consortium.
“So far there is nothing to supply via different routes, as recovery is not that large-scale,” Rekeda says.
Meantime, Azerbaijan may turn more attractive for transportation of the Kazakh oil, if it reduces the transit rates, experts say.
“CPC has big advantages, as it is relatively underloaded this year as oil streams from the land-based fields of Kazakhstan have decreased. Besides, it offers lower tariffs,” says Marat Shibutov, an expert at the Association of Border Cooperation. “Therefore, the route via the Caspian Sea region and transportation via BTC pipeline is possible only after Kazakhstan increased recovery by 15-20 million tons, or in case of a dramatic decline of tariffs. Let Azerbaijan’s authorities make that step and then, maybe, the Kashagan oil will flow away from CPC to BTC.”