Kazakhstan's authorities have linked two Western-led oil and gas projects to an almost 3% decrease in the country's oil production this year.

Source: UpstreamOnline

The government has identified the Tengiz and Kashagan projects as the main contributors to the reduction, which has brought the nation’s output down to approximately 1.83 million barrels per day.

Along with Karachaganak, Tengiz and Kashagan are among the three primary foreign-led oil and gas initiatives in Kazakhstan.

During a government meeting in Astana earlier this week, Energy Minister Almasadam Satkaliyev stated that the initial cause of the downward adjustment in oil production was a lengthy turnaround of offshore facilities at the Kashagan field in the Caspian Sea.

Operated by Italy’s Eni and UK-based Shell, Kashagan halted production for three weeks in October to conduct a comprehensive turnaround of its offshore facilities.

This maintenance decision proceeded despite a prior government request to delay the outage due to worries about domestic gas shortages.

The Energy Ministry anticipates that this turnaround will reduce Kashagan’s oil and condensate production to around 345,000 barrels per day this year, marking a decline of over 7% compared to 2023.

However, the impact on Kazakhstan's total production from Kashagan's shutdown has been intensified by the partial shutdown of a sour gas and sulfur treatment unit at the Tengiz field at the end of October, as reported by the Interfax-Kazakhstan news agency.

Tengiz, the largest onshore development in the country, is managed by the Chevron-led Tengizchevroil joint venture.

The sour gas and sulfur treatment facility is one of four critical components of Tengiz's second-generation plant (SGP), which was launched in 2008 to eliminate hazardous hydrogen sulfide from hydrocarbon streams by converting it into elemental sulfur.

According to Satkaliyev, Tengizchevroil had to shut down a waste heat exchanger within the facility for unplanned repairs after discovering structural damage, reportedly due to rust, on October 26.

Initially, Tengizchevroil anticipated repairs would be completed by November 23, but the operator later informed the ministry that the repairs would not be finished until after December.

This partial shutdown has caused a significant reduction in oil production from the field, which dropped by 20% from the initial output target to 494,000 barrels per day earlier in December, as reported by a statistics department within the Energy Ministry according to Reuters.

In early November, Chevron, which owns a 50% stake in the Tengiz project, announced that the field had achieved its highest daily oil output in the company's 31-year history at the development, following the commissioning of newly constructed oil and gas processing facilities and wells under the multi-billion dollar FGP-WPMP capacity expansion project.

However, the Energy Ministry now projects that Tengiz's oil production for 2024 will be 2% lower than last year, at 566,000 barrels per day, due to the partial shutdown and the two previous turnarounds undertaken in preparation for the commissioning of the FGP-WPMP project.

Beyond this, Tengizchevroil does not comment on current or future production levels. The delivery of crude oil from the Tengiz field to the Caspian Pipeline Consortium remains uninterrupted.

These turnarounds accumulated a total of 50 days in May and August, according to the ministry.

Over 90% of Tengiz's oil is exported to international markets, primarily to Europe, via the Caspian Pipeline Consortium-operated line that runs from the Tengiz field to a marine export terminal near the Russian Black Sea port of Novorossiysk.