Support independent journalism in Central & Eastern Europe.
Donate to TOL!

× Learn more
No, thanks Photo: Abbas Atilay
 
back  |  printBookmark and Share

Kazakhstan to Pull Out of OPEC Production Cap

China is projected to buy an ever-increasing share of Kazakh and Central Asian energy in the coming years.

12 July 2017

Kazakhstan is gradually pulling away from its pledge to participate in OPEC’s oil production cap.

 

The move was not unexpected. Energy Minister Kanat Bozumbaev admits that Kazakhstan will complete its withdrawal from the cap over the next two months, EurasiaNet.org reports, citing TASS.

 

OPEC members and other oil-producing countries, including Kazakhstan, agreed in November to reduce daily output by 1.8 million barrels in a bid to nudge prices higher. They later decided to extend the cap until March 2018.

 

Rather than falling, oil production this year is likely to exceed the previous projected volume of 81 million tons, or about 578 million barrels, Bozumbaev said at a weekend industry conference in Istanbul, according to EurasiaNet.

 

Much of its oil output in the coming years may well be destined for China rather than its traditional Western customers.

 

China’s share of the Kazakh energy market is rising steadily as its economic footprint continues to deepen across Central Asia. Independent experts estimate China’s share of annual oil production at around 40 percent, Kazakh oil analyst Sergei Smirnov told bne Intellinews. The official figure is about 25 percent.

 

If current trends continue, China could be absorbing half of Central Asia’s oil and gas exports in just three years, according to the International Energy Agency. However, Western oil majors such as Chevron, Exxon Mobil and Eni still account for most of Kazakhstan’s oil production.

 

Smirnov said the perception that China’s appetite for buying up Kazakh energy companies was triggered by low energy prices is misled. In fact Chinese companies have often paid up to twice the real value for shares in Kazakh companies, he said.

 

 

  • Kazakhstan’s share in the OPEC cap was never large to begin with. It agreed to remove 20,000 barrels a day from production, UPI reported last month. Other Central Asian producers also signed on to the cap.

 

  • UPI cites an estimate by OPEC economists that oil production averaged 1.72 million barrels per day during the first quarter, an increase of about 40,000 barrels per day compared to the same period last year.

 

  • Kazakhstan ranked No. 15 on the list of world oil producers in 2015, according to the CIA World Factbook.

Compiled by Ky Krauthamer

back  |  printBookmark and Share

TOL PROMOTION

Announcement

  

Going on Assignment in Prague – January 7-15, 2018

Do you have a passion for foreign reporting? Would you like to develop your skills further or simply gain more confidence? This course is aimed at university students, freelance journalists or activists who would like to gain some practical skills in this field. You’ll learn the best tricks of the trade from storytelling and interviewing techniques to locating your sources and incorporating multimedia.

Throughout the course you will be guided by experienced foreign correspondents from media such as Reuters, the BBC, the Financial Times, and the New York Times. You’ll leave equipped with a publishable story to add to your portfolio. Early bird fee available until September 1, 2017. Apply now! or see more info.


MULTIMEDIA PROJECTS

Moldovan diaries

The Moldovan Diaries is a multimedia, interactive examination of the country's ethnic, religious, social and political identities by Paolo Paterlini and Cesare De Giglio.

This innovative approach to story telling gives voice to ordinary people and takes the reader on the virtual trip across Moldovan rural and urban landscapes. 

It is a unique and intimate map of the nation.

RELATED ARTICLES

© Transitions Online 2017. All rights reserved. ISSN 1214-1615
Published by Transitions o.s., Baranova 33, 130 00 Prague 3, Czech Republic.