17 September 2013, Astana – Kazakhstan’s oil production could slump sharply over the longer term if no new deposits are developed, its oil minister said on Tuesday, just days after the launch of output at the huge Kashagan oilfield.
Kashagan, located in the Caspian Sea off western Kazakhstan, produced its first oil last week after years of delay and some $50 billion invested by a multi-national consortium to date.
For Kazakhstan, the launch of output at the world’s biggest oil find in decades revitalised hopes of oil-driven prosperity.
The second-largest oil producer after Russia among former Soviet states, Kazakhstan forecasts its oil exports will peak at over 90 million tonnes in 2025, Oil and Gas Minister Uzakbai Karabalin told a government meeting.
The vast steppe nation of 17 million, which is Central Asia’s largest economy and holds 3 percent of global recoverable oil reserves, exported 68.14 million tonnes of crude oil and gas condensate last year, official statistics show.
Citing a “pessimistic scenario”, Karabalin said Kazakhstan’s oil output would peak at about 110 million tonnes by 2030.
“Our optimistic plan will depend on the approval of further stages of development at Kashagan and other large deposits and, besides, on whether we will be able to launch new fields that can be discovered over this period,” Karabalin said.
Output at Kashagan is expected to grow up to a peak of 180,000 barrels per day in the first phase. Production will then steadily grow up to 370,000 barrels of oil equivalent per day.
“If we do not launch output at new deposits, one should expect oil output to decline to between 30 million tonnes and 50 million tonnes in 2050,” Karabalin said.
The country’s oil output totalled 79.2 million tonnes in 2012 and is forecast to rise to 82 million this year.
Not That Optimistic
Kazakh President Nursultan Nazarbayev, a 73-year-old former steelworker who has run the resource-rich state with a firm hand for more than two decades, last week toned down optimistic forecasts of sky-rocketing oil output.
He told an economic forum that it would be enough to eventually produce 2 million barrels of oil a day (bpd).
A decade ago, his government saw land-locked Kazakhstan eclipsing Mexico and Norway with output of well above 3 million bpd to become a global top five producer by 2015.
“With its (oil) reserves, Kazakhstan is among the top 10 countries of the world, which allows it to successfully produce oil for at least another 50 years,” Karabalin said.
But he added: “There are a number of aspects weakening the position of Kazakhstan’s (oil) industry, including high costs (of oil output) and specific quality of its oil, high transport costs and a low share of Kazakh companies in oil production.”
Kazakhstan controls 34 percent of the country’s oil output, the United States holds 25 percent and China 23 percent, he said.
KazMunaiGas, Italy’s ENI, U.S. major ExxonMobil, Royal Dutch Shell and France’s Total each hold 16.81 percent stakes in Kashaan. Japan’s Inpex owns 7.56 percent.
China National Petroleum Corp (CNPC) acquired an 8.33 percent stake this year.
The deal, estimated to be worth $5 billion, followed Kazakhstan’s decision in July to use its pre-emptive rights to buy an 8.40 percent stake from U.S. oil major ConocoPhillips in the field for a similar price.
– Reuters
