Mar 13, 2025
Kazakhstan is fully dedicated to OPEC+, and the excess production is not a significant issue for global stability.
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Kazakhstan continues to honor its quota commitments as a member of the OPEC+ producer group, despite recently exceeding its quotas, according to its energy ministry on March 12. This statement followed discussions in Houston that did not result in specific commitments from operators regarding quota compliance.
Energy Minister Almasadam Satkaliyev announced on March 7 that the expansion of the Tengiz oil field, led by a Chevron consortium, would be delayed until the second half of 2025 rather than the previously expected second quarter, to help adhere to OPEC+ quotas. Satkaliyev held talks this week at CERA Week in Houston with Chevron and ExxonMobil, the largest stakeholders in the Tengizchevroil consortium, but no concrete agreements on production limits were reached.
During discussions with Chevron CEO Mike Wirth and ExxonMobil upstream vice president John Whelan, key aspects of the Tengiz and Kashagan fields were addressed, including the implementation of the Tengiz Future Growth Project. The energy ministry stated that further plans for oil production were examined in light of global market stabilization efforts and Kazakhstan's international obligations. The minister emphasized the importance of meeting deadlines and optimizing costs, and additional oil and gas exploration projects were also discussed.
In response to recent scrutiny regarding non-compliance with OPEC+ quotas, the ministry issued another statement attributing overproduction at Tengiz to the technical process of ramping up the $49 billion expansion and underscoring the long-term outlook.
Kazakhstan reaffirmed its commitment to the OPEC+ Agreement and its intention to fulfill its obligations, including compensating for any overproduced volumes. The ministry clarified that the current overproduction in February resulted from technological processes associated with the Future Expansion Project at the Tengiz field, which aims to ensure stable energy supplies and meet medium-term obligations.
In a global context, the ministry pointed out that Kazakhstan's share of global oil production is only 1.5% and approximately 3% within OPEC+. This indicates that Kazakhstan does not significantly affect the global supply and demand balance, yet the country remains a reliable partner fulfilling its commitments.
Increases in Kazakh oil production, particularly from significant Caspian fields operated by international consortia, have been a contentious issue within OPEC+, with Kazakhstan often accused of exceeding its quotas. ExxonMobil is also a partner in the Kashagan field, which produced around 370,000 b/d in 2024.
Chevron did not comment on whether an agreement was made regarding the postponement of the Tengiz ramp-up after a recent increase in volumes that boosted exports of Kazakhstan's CPC Blend crude grade. A TCO spokesperson noted that Tengizchevroil has safely commenced initial production from the Future Growth Project, anticipating a total annual crude oil production of about 40 million mt/year once all facilities are fully operational. However, TCO did not provide comments on specific current or future production levels.
On January 31, Wirth indicated to investors regarding the Tengiz expansion that compliance with OPEC+ quotas was not included in their planning. The Tengiz expansion project, costing nearly $49 billion, has Chevron holding a 50% share in the Tengizchevroil consortium. Wirth projected full production rates of 1 million b/d of oil equivalent within the next three months during an investor briefing.
Kazakhstan was among several OPEC+ members that exceeded their quotas in February, particularly as quotas were set to ease on April 1, being the largest violator with an overproduction of around 300,000 b/d, according to the Platts OPEC+ Survey from S&P Global Commodity Insights.
Recent price assessments by Platts indicated that discounts for CPC Blend widened to around $3/b, likely reflecting the Tengiz ramp-up and security risks in the Red Sea that have impacted oil exports from the Mediterranean to Asia. On March 11, Platts assessed CPC Blend at a $3.30/b discount to Dated Brent.
Energy Minister Almasadam Satkaliyev announced on March 7 that the expansion of the Tengiz oil field, led by a Chevron consortium, would be delayed until the second half of 2025 rather than the previously expected second quarter, to help adhere to OPEC+ quotas. Satkaliyev held talks this week at CERA Week in Houston with Chevron and ExxonMobil, the largest stakeholders in the Tengizchevroil consortium, but no concrete agreements on production limits were reached.
During discussions with Chevron CEO Mike Wirth and ExxonMobil upstream vice president John Whelan, key aspects of the Tengiz and Kashagan fields were addressed, including the implementation of the Tengiz Future Growth Project. The energy ministry stated that further plans for oil production were examined in light of global market stabilization efforts and Kazakhstan's international obligations. The minister emphasized the importance of meeting deadlines and optimizing costs, and additional oil and gas exploration projects were also discussed.
In response to recent scrutiny regarding non-compliance with OPEC+ quotas, the ministry issued another statement attributing overproduction at Tengiz to the technical process of ramping up the $49 billion expansion and underscoring the long-term outlook.
Kazakhstan reaffirmed its commitment to the OPEC+ Agreement and its intention to fulfill its obligations, including compensating for any overproduced volumes. The ministry clarified that the current overproduction in February resulted from technological processes associated with the Future Expansion Project at the Tengiz field, which aims to ensure stable energy supplies and meet medium-term obligations.
In a global context, the ministry pointed out that Kazakhstan's share of global oil production is only 1.5% and approximately 3% within OPEC+. This indicates that Kazakhstan does not significantly affect the global supply and demand balance, yet the country remains a reliable partner fulfilling its commitments.
Increases in Kazakh oil production, particularly from significant Caspian fields operated by international consortia, have been a contentious issue within OPEC+, with Kazakhstan often accused of exceeding its quotas. ExxonMobil is also a partner in the Kashagan field, which produced around 370,000 b/d in 2024.
Chevron did not comment on whether an agreement was made regarding the postponement of the Tengiz ramp-up after a recent increase in volumes that boosted exports of Kazakhstan's CPC Blend crude grade. A TCO spokesperson noted that Tengizchevroil has safely commenced initial production from the Future Growth Project, anticipating a total annual crude oil production of about 40 million mt/year once all facilities are fully operational. However, TCO did not provide comments on specific current or future production levels.
On January 31, Wirth indicated to investors regarding the Tengiz expansion that compliance with OPEC+ quotas was not included in their planning. The Tengiz expansion project, costing nearly $49 billion, has Chevron holding a 50% share in the Tengizchevroil consortium. Wirth projected full production rates of 1 million b/d of oil equivalent within the next three months during an investor briefing.
Kazakhstan was among several OPEC+ members that exceeded their quotas in February, particularly as quotas were set to ease on April 1, being the largest violator with an overproduction of around 300,000 b/d, according to the Platts OPEC+ Survey from S&P Global Commodity Insights.
Recent price assessments by Platts indicated that discounts for CPC Blend widened to around $3/b, likely reflecting the Tengiz ramp-up and security risks in the Red Sea that have impacted oil exports from the Mediterranean to Asia. On March 11, Platts assessed CPC Blend at a $3.30/b discount to Dated Brent.