(Bloomberg) -- Kazakhstan lowered oil production sharply in October, with maintenance work closing one of its main fields, but still failed to meet its OPEC+ output cuts target.
The Central Asian nation pumped 1.29 million barrels a day in October, according to figures published by the Organization of Petroleum Exporting Countries. That was down by 292,000 barrels a day from September, but was still almost 90,000 barrels a day above its output target, which had been reduced to compensate for earlier over-production.
The government in Astana is now likely to come under increased pressure when OPEC+ oil ministers meet on Dec. 1 to set production plans for next year. So too is that of Iraq, the group’s other big over-producer.
OPEC+ has been forced twice to delay plans to begin easing some voluntary output cuts, amid lackluster prices and dwindling prospects for demand growth. The start date for putting barrels back into the market has been pushed to the beginning of January from October. Several analysts have said it may have to be delayed further amid concerns about oversupply next year.
The planned closing of the country’s second-biggest field, Kashagan, for maintenance work that was scheduled to run from the start of October through the first week of November was meant to provide a painless route to meeting the country’s commitment.
But the work started late and finished earlier than planned — helpful for the companies that have poured billions of dollars into the much troubled project, but not so good for the country’s commitment to its OPEC+ partners, who are trying to limit supplies in order to prop up prices.
The situation may become increasingly uncomfortable for Kazakhstan, where operator TengizChevroil is expected to see the first fruits from an expansion of the giant Tengiz field in the second quarter of 2025. The project, estimated in March to cost $48.5 billion, will add about 260,000 barrels a day to Kazakhstan’s production capacity.
That’s oil that both the government and the foreign investors will want to pump. But doing so would set Kazakhstan on a collision course with the rest of the OPEC+ group and make its production target even more difficult to reach.
Kazakhstan’s energy ministry didn’t comment when contacted about its October over-production. Production figures are those reported from seven secondary sources used by OPEC to monitor the output accord.
--With assistance from Nariman Gizitdinov.
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