Kazakhstan Nov CPC crude loadings 25% below March peak as OPEC+ cuts grind on

London — Loadings of Kazakhstan's CPC crude blend at Novorossiisk rose slightly in November, by 16,000 b/d to 1.24 million b/d, but remained 25% below their March peak, with the Kashagan and Tengiz fields bearing the brunt of OPEC+ production cuts, data from the terminal operator showed Dec 1.

Data from the Caspian Pipeline Consortium, which operates Kazakhstan's main crude export route across southern Russia to the Black Sea, continue to reflect the sharp production cuts the country agreed to under an international deal reached in April between OPEC+ nations, led by Russia and Saudi Arabia, in response to the coronavirus price meltdown. Independent reports suggest Kazakhstan has complied much more closely with agreed cuts than earlier in its involvement with the group.

Kazakhstan is among countries thought to be pushing for a relaxation of collective production cuts at OPEC+ talks taking place this week.

Out of total CPC loadings in November, crude from Kazakhstan's highest-producing field, Tengiz, amounted to some 541,000 b/d, a 25% drop from March levels, while crude from the second-highest producing field, Kashagan, amounted to 267,000 b/d, an even greater percentage drop, of 43%.

CPC is considered a light sweet crude with an API gravity of 44-45. Demand for CPC has shown signs of recovering lately, with the grade trading at a premium to Dated Brent.

In production since 1993, the Tengiz field, operated by a Chevron-led consortium, has long been the mainstay of CPC crude, but has been joined by rising production from the giant Kashagan field, which came on stream in 2016 following delays and technical glitches.

The operator of Tengiz has been obliged to drop production, which had averaged 670,000 b/d in the first quarter, just as it is working on a $45.2-billion development project intended to raise production to 850,000 b/d of crude and 1 million b/d of oil equivalent overall, with the expansion work due to be completed by mid-2023.

Karachaganak, the Kazakh field with the third-highest liquids production, has been largely unaffected due to the high content of gas liquids in the production stream.

The Dec. 1 data showed an increased share of Russian crude in the total loading volumes, albeit still a relatively low share, at roughly 191,000 b/d. Though mainly dedicated to Kazakh crude, the pipeline also picks up some crude produced from Lukoil-operated fields in Russia's sector of the Caspian Sea.