Kazakhstan seeks Tengiz and Kashagan output cuts

Market: Crude oil
07/03/25

Kazakhstan has asked international operators to slash crude production at its Tengiz and Kashagan oil fields so that it can meet its Opec+ output target, deputy energy minister Alibek Zhamauov said today.

Zhamauov said the ministry held preliminary talks with ExxonMobil, TotalEnergies, Eni and Shell this week, and that energy minister Almasadam Satkaliyev will travel to the US next week to hold further discussions with company chief executives on lowering output. "Our [initial] request was well received," he said.

The deputy minister said that Kazakhstan will strive to lower crude production by 297,000 b/d to 1.45mn b/d in March.

Zhamauov said that most of the reduction in output will come in the second half of the month, following the conclusion of talks with foreign operators. If Kazakhstan reduces output in line with its latest pledge, this will have a knock-on impact on its exports through the CPC pipeline system, the main export route for Kazakh crude and condensate.

"The big portion of our oil goes to CPC direction. So if we cut the major oil fields, then we will expect a reduction in the CPC direction as well," Zhamauov said.

Kazakh output from Tengiz and its Kashagan fields accounts for the bulk of CPC Blend exports, which had been expected at 1.6mn-1.7mn b/d in March.

Increased output from the Tengiz field helped boost Kazakhstan's production by 297,000 b/d to a record 1.747mn b/d in February, 279,000 b/d above its Opec+ target of 1.468mn b/d. Kazakhstan's March target of 1.45mn b/d includes an additional 18,000 b/d cut related to its plan to compensate for past overproduction.

The Chevron-led Tengizchevroil consortium launched a third crude production plant at the field in January. This helped boost Tengiz production to 878,000 b/d in February, compared with about 500,000 b/d in mid-January — although part of the increase is explained by the completion of maintenance at another crude unit at Tengiz.

Overseas shareholders in Tengizchevroil include Chevron and ExxonMobil, with 50pc and 25pc stakes, respectively. International shareholders in Kashagan operator NCO include Shell, TotalEnergies, Eni and ExxonMobil (16.81pc each), as well as China's CNPC (8.33pc) and Japan's Inpex (7.56pc).

Kazakhstan remains one of the Opec+ alliance's largest overproducers, despite repeatedly pledging to compensate for exceeding its target since January 2024. This has frustrated other Opec+ members that have largely stuck to their production targets. Zhamauov reiterated Kazakhstan's commitment to the Opec+ alliance. "We fully understand the importance of the Opec+ mission to stabilise the oil market and price for oil," he said.

Opec+ members, including Kazakhstan, agreed this week to proceed with a plan to start unwinding 2.2mn b/d of voluntary production cuts starting in April.

By Aydin Calik

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