Kazakhstan’s state-controlled giant KazMunaigaz has revealed a double-digit decline in oil and condensate production at two major foreign-led developments in the country, Tengiz and Karachaganak.
According to the company’s operational statement for this year's first quarter, production at the country’s largest offshore deposit, Kashagan, fell by almost 17% compared with the same period a year earlier to 545,000 barrels per day, while output at the onshore Tengiz field dropped by over 13% to 295,000 bpd.
The disclosure revealed the extend of the slowdown that both projects — still under development and construction — suffered last year as a result of the Covid-19 pandemic and the drop in energy demand.
Despite the rise of oil prices this year and an overall improvement in the Covid-19 situation in Kazakhstan, both developments had been unable to restore output to levels that were seen before the pandemic.
KazMunaigaz said both projects also suffered due to the country's commitment to the Opec+ alliance to reduce the country's total oil production.
Opec+ is a grouping of Opec and other key producers, led by Russia, that has aimed to rebalance flagging oil markets through output curtailments.
Earlier, Kazakh governmental officials said they were braced a poor performance from the two developments this year.
Both developments saw the evacuation of thousands of shift builders and workers last summer in response to a rising numbers of Covid-19 infections.
According to reports in the Kazakh oil city of Atyrau — which is close to both projects — authorities only started to partially relax coronavirus restrictions this month.
From 10 May, Kazakh health authorities said that they are lifting a mandatory quarantine requirement for arriving shift workers who have a proof of the full vaccination against Covid-19, for US Chevron-led operator of the Tengiz field, Tengizchevroil.
Incoming personnel with a negative coronavirus test but not vaccinated will have to remain in isolation in dormitories at the field for seven days, against an earlier requirement of two weeks.
Atyrau health authorities said on Wednesday that about 10,000 workers on Tengiz already received a first injection of Russian made vaccine.
Tengiz and Kashagan are currently implementing multi-billiondollar expansion projects to raise their output that they will export from Kazakhstan to international markets to repay their investments.
KazMunaigaz also said its three wholly owned oil producing subsidiaries — Ozenmunaigaz, Mangistaumunaigaz and Embamunaigaz — were not immune to challenging environment, with their output declining by between 7% and 15% in the first quarter as against a year earlier.
Together with its share of production in the Tengiz, Kashagan and Karachaganak projects, KazMunaigaz's oil and condensate production declined by 10% to 433,000 barrels per day in the first quarter as compared with a year earlier.
For its oil and gas pipeline transportation subsidiaries, KazMunaigaz reported higher shipping volumes only for pipelines that export and transit hydrocarbons to China, in the first quarter.