KEY POINTS
- Tengiz oil field reached record production in October at 699,000 bpd.
- Kazakhstan exceeded its OPEC+ production quota by 170,000 bpd in September.
- Expansion plans at Tengiz could further strain OPEC+ compliance in 2025.
Early October saw record production levels in Kazakhstan’s largest oil field, Tengiz, which is run by American company Chevron. This could make it more difficult for the nation to meet its OPEC+ production targets. Tengiz increased its daily production from 687,000 barrels per day (bpd) in September to 699,000 bpd, according to people familiar with the situation.
Record output at Tengiz
The production spike comes after maintenance was finished in August, which allowed the Tengiz oil field to greatly increase output. Although the increase is encouraging for Kazakhstan’s oil industry, it could make it more difficult to maintain OPEC+ quota compliance.
Chevron owns 50 percent of the Tengiz field as part of a partnership that also includes ExxonMobil (25 percent), Kazakhstan’s KazMunayGaz (20 percent), Russia’s Lukoil (5 percent), and Kazakhstan.
The field’s operator, Tengizchevroil, acknowledged that activities were continuing as usual but declined to comment on future production plans. The energy ministry of Kazakhstan likewise declined to comment on projections for 2024 and 2025 production.
Strain on OPEC+ compliance
OPEC+ member Kazakhstan has had difficulty meeting its output goals this year. Future compliance efforts are under strain because the nation’s September production quota was surpassed by 170,000 barrels per day.
According to Reuters, Kazakhstan’s enhanced production at its key oil resources, Tengiz, Karachaganak, and Kashagan, allowed it to surpass its OPEC+ target of 1.468 million barrels per day.
According to sources, Kazakhstan is expected to meet its October production target despite the surge at Tengiz because of a planned maintenance stoppage at the 400,000 barrel per day (bpd) Kashagan oil field.
Maintaining compliance, however, might prove to be quite difficult once Kashagan starts up again in November.
Expansion plans and future challenges
A significant expansion is being planned by Chevron and its Tengiz partners, which will raise production to 850,000 barrels per day by the middle of 2025.
The estimated $49 billion cost of this development casts doubt on Kazakhstan’s capacity to uphold OPEC+ accords.
Kazakhstan’s biggest fields will probably continue to ramp up production, increasing the strain to satisfy quotas. OPEC+’s de facto leader, Saudi Arabia, has asked member countries to better adhere to output quotas in order to maintain market stability.
