Kazakhstan fully committed to OPEC+, over-production not critical to global balances: ministry

Kazakhstan remains committed to meeting its quota obligations as a member of the OPEC+ producer group despite recently exceeding quotas, its energy ministry said March 12 after talks in Houston failed to yield specific commitments from operators on quota compliance.

The statement came after energy minister Almasadam Satkaliyev said March 7 that the rampup of the Tengiz oil field expansion, under a Chevron-led consortium, would be postponed until the second half of 2025 from the second quarter, to help meet OPEC+ quota obligations. Satkaliyev subsequently held talks this week at CERA Week in Houston with Chevron and ExxonMobil, the two largest shareholders in the Tengizchevroil consortium, without a concrete agreement being reached on limiting production.

At talks with Chevron CEO Mike Wirth and ExxonMobil upstream vice president John Whelan, "discussions took place on key aspects of projects at the Tengiz and Kashagan fields, including implementation of the [Tengiz] Future Growth Project," Kazakhstan's energy ministry said. "Also examined were plans for further crude oil production volumes in the context of global efforts to stabilize the market and Kazakhstan's international obligations. The minister stressed the need to meet deadlines and optimize expenditure," the ministry said in a statement, adding that further oil and gas exploration projects had been discussed.

Facing scrutiny of its flouting of OPEC+ quotas, the ministry later put out an additional statement, saying recent "overproduction" at Tengiz was attributable to the technical process of ramping up the $49 billion expansion and stressing the longer-term outlook.

Kazakhstan "declares its full commitment to the OPEC+ Agreement and continues to work purposefully to fulfill its obligations, including compensation for the overproduced volumes," the ministry said. "The current overproduction in February is due to technological processes with the framework of the Future Expansion Project at the Tengiz field. This is a long-term project which is aimed at ensuring stable energy supplies, as well as fulfilling our medium-term obligations."

Global context

"It should also be taken into account that Kazakhstan's share in global oil production accounts for only 1.5% and within OPEC+ about 3%. This shows that Kazakhstan does not have a critical impact on the global balance of supply and demand, however, despite this, our country remains a reliable partner and fulfills its obligations," the ministry added.

Kazakh oil output increases, centered on giant Caspian fields operated by international consortia, have proved a bone of contention within OPEC+ -- a group led by Russia and Saudi Arabia -- as Kazakhstan is deemed to have repeatedly flouted quotas.

ExxonMobil is also a partner in the Kashagan field, which produced some 370,000 b/d in 2024.

Chevron declined to comment on whether a specific agreement had been reached on postponing the Tengiz ramp-up, following a recent surge in volumes that have lifted exports of Kazakhstan's trademark crude grade, CPC Blend.

"Tengizchevroil has safely started initial production from the Future Growth Project. Once all Tengiz facilities are operating at full capacity, TCO's total annual crude oil production is expected to reach approximately 40 million mt/year," a TCO spokesperson said. "Beyond this, TCO does not comment on specific details of current or future production levels."

On Jan. 31, Wirth, speaking with investors about the Tengiz expansion, gave no hint that complying with OPEC+ quotas was part of company planning. The Tengiz expansion project cost nearly $49 billion, with Chevron holding a 50% share in the Tengizchevroil consortium. "We expect to achieve full production rates – 1 million b/d of oil equivalent – within the next three months," Wirth said at the investor briefing event.

Kazakhstan was one of a number of OPEC+ members that flouted their quotas in February ahead of a planned easing of quotas from April 1, and was by far the biggest quota buster during the month, with over-production of around 300,000 b/d, according to the Platts OPEC+ Survey from S&P Global Energy.

Price assessments by Platts show discounts for CPC Blend widening to around $3/b in recent weeks, likely reflecting the Tengiz ramp-up and security risks in the Red Sea that have limited oil exports from the Mediterranean region to Asia.

Platts assessed CPC Blend at a $3.30/b discount to Dated Brent on March 11.