Kazakhstan’s oil and condensate production was down slightly last year against the previous year, according to the country’s energy ministry.
Despite repeated issues with its main export route to international markets and a dramatic decline in oil exported via a legacy connector to the Russian pipeline network, total oil output fell by just 2% — compared with 2021 — to 1.75 million barrels per day.
According to the ministry, the largest decline of 22%, to 264,000 bpd, was seen at Kashagan, Kazakhstan’s largest offshore development in the Caspian Sea.
The country’s largest onshore project — Tengiz — increased production by 10% to 610,000 bpd, despite work continuing on a multibillion dollar expansion project, the first phase of which is set to be completed by the end of this year.
Condensate production at the country’s third-largest project, Karachaganak, fell just marginally to 235,000 bpd, according to the ministry.
While the ministry did not provide a figure for crude delivered across the country’s main oil export route, which transits Russia, an earlier forecast from operator Caspian Pipeline Consortium suggested seaborne shipments of 1.2 million barrels, a 10% decline in the original volumes expected for 2022.
Caspian Pipeline Consortium carries 80% of Kazakh crude exports via its network across Russian territory to the terminal at Novorossiysk.
However, it has been excluded from Western sanctions against Russia following the invasion of Ukraine because its network remains the major export route for Kazakhstan’s foreign-led Tengiz, Kashagan and Karachaganak oil producing projects.
Caspian Pipeline experienced several operational issues last year, prompting a downgrade in forecasts for both Kazakhstan and Tengiz operator Tengizchevroil because of their dependence on the route.
Kazakhstan also experienced a drop in exports via its second transit route, the legacy Atyrau–Samara link to the Russian trunkline network, according to preliminary information from Kazakh oil pipeline operator KazTransoil.
Kazakh producers are entitled to send 312,000 bpd via the Atyrau–Samara connector for export to international markets from the Russian seaports of Novorossiysk and Ust-Luga, according to an intergovernmental agreement between the two countries.
Deliveries via this route — operated by Russian pipeline monopoly Transneft — have been in steady decline since 2020, but plunged 24% to 175,000 bpd last year against 2021’s volumes, according to KazTransoil.
German market in sight
The Atyrau–Samara connector is the only means available for Kazakhstan to fulfil its ambitions of exporting crude to Germany via Russia’s Druzhba pipeline, which transits Belarus and Poland.
Russian oil supplies to Germany via Druzhba dried up this month following the European embargo on Russian oil imports, with volumes being replaced by seaborne deliveries via Poland.
Kazakh Energy Minister Bolat Akchulakov said after a governmental meeting in Astana earlier this week that KazTransoil is still working with Transneft to complete formalities on a long-discussed trial shipment of Kazakh crude to Germany, totalling just 150,000 barrels, later this month.
KazTransoil said in a statement on Friday that Russian Energy Ministry issued a permission for Kazakh producers to ship about 2.3 million barrels of oil to via Druzhba to Germany during the first quarter of this year.
At the end of December, a Transneft spokesperson told Russia’s state news agency, Ria Novosti, that KazTransoil had asked the Russian pipeline operator to enable the transit of a total of 9.1 million barrels of Kazakh oil to Germany in 2023 via its network and Druzhba.
However, Akchulakov said this week that Kazakhstan aims to increase this to 11.4 million barrels.
According to Akchulakov, the Kazakh Energy Ministry believes the country’s producers will be able to send about 46 million barrels of oil each year via Druzhba to Germany.
Transneft had not responded to Upstream’s request for comment by the time of publishing.
* The story was updated to include a statement from KazTransoil.