Oil Production: Will Kazakhstan and OPEC Butt Heads?
Photo: Elements.envato.com
Kazakhstan may conflict with other OPEC+ members over its plans to increase oil production in 2025, according to BNN Bloomberg, Orda.kz reports.
On December 17, Prime Minister Olzhas Bektenov announced at a government meeting that he had instructed the Ministry of Energy to step up efforts to increase oil production and ensure the planned production scale.
In August, Kazakhstan planned to produce 97.2 million tons of oil in 2025.
However, OPEC+ extended production cuts until April to shore up oil prices.
Kazakhstan has already been under pressure from the leaders of OPEC+, Russia and Saudi Arabia, for largely failing to implement its share of production cutbacks pledged at the beginning of 2024. The country has also fallen short of pledges to make additional curbs as compensation for initial overproduction, BNN Bloomberg says.
Kazakhstan will increase oil production by implementing the long-awaited expansion project at Tengiz.
The Finance Ministry is already pinning high hopes on it. The increase in production is expected to be 190,000 barrels per day.
Per the quotas set, Kazakhstan in 2025 can increase oil production by no more than 41 thousand barrels per day.
And given the obligations to compensate for overproduction, this figure is even less. Meanwhile, reports surfaced yesterday that oil production has dropped in Kazakhstan.
By the end of 2024, Kazakhstan will produce less oil than the Ministry of Energy planned. In 2023, it was assumed that the 2024 production volume would reach 95.4 million tons.
Later, the ministry reduced the plan to a more realistic mark of 90.3 million tons; by the end of the year, production will amount to 87.8 million tons.
The country's economy remains reliant on oil production, and there is no other way out except to increase production to replenish the budget and the National Fund.
This is not the first time Bloomberg has predicted an inevitable conflict between Kazakhstan and other OPEC+ members. Bloomberg columnist Javier Blas said that Kazakhstan would become the cartel's "internal enemy" in 2025, as it systematically fails to fulfill its obligations to limit production.
Original Author: Nikita Drobny
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