Kazakhstan wants more oil output to stay at home to tackle fuel problems

Folks attend a rally to protest towards LPG value rise following the Kazakh authorities’ determination to elevate value caps on liquefied petroleum fuel in Almaty, Kazakhstan January 5, 2022. REUTERS/Pavel Mikheyev

MOSCOW, Feb 4 (Reuters) – Kazakhstan has requested the overseas firms working its essential oilfields to produce the home market so it may possibly enhance its refining trade and deal with the rising gasoline costs that led to violent protests in January.

Vitality minister Bolat Akchkulakov mentioned Kazakhstan cannot ramp up home refining with out provides from the foreign-led consortia working its Tengiz, Kashagan and Karachaganak oilfields, in response to notes accompanying a presentation he gave to journalists.

The fields presently export all of their output.

A supply near one of many consortia mentioned the vitality ministry was searching for provides within the subsequent two to a few years, however was sceptical the operators would reply favourably.

“We glance into it, however I doubt it may be worthwhile,” he mentioned, including export costs are presently two or thrice greater than home ones.

Kazakhstan was rocked by a uncommon flare-up of protests in January that had been initially triggered by gasoline shortages and rising costs. Though the federal government quelled the unrest, it’s on the lookout for methods to stop a recurrence. learn extra

As a part of its plan, the vitality ministry is proposing to double capability at its Shymkent refinery, which might presently course of round 120,000 barrels of oil per day (bpd).

“It isn’t doable to do that with out provide from Tengiz, Kashagan and Karachaganak,” the presentation notes mentioned.

The notes mentioned the ministry noticed the necessity to improve home oil costs to draw the overseas operators. Nevertheless it was not clear how this could possibly be achieved.

Tengiz is operated by Chevron-led (CVX.N) Tengizchevroil, whereas Kashagan’s operator is the internationally-owned North Caspian Oil Consortium (NCOC). Karachaganak is operated by Karachaganak Petroleum Working (KPO), which is led by Eni and Shell (SHEL.L).

Chevron mentioned it didn’t touch upon business issues. NCOC and KPO did not instantly reply to the requests for remark.

Tengiz, Kashagan and Karachaganak account for about 63% of Kazakhstan’s oil output, however below the phrases of their manufacturing sharing agreements the operators are capable of export the entire output.

Reporting by Alla Afanasyeva and Olga Yagova in MOSCOW
Modifying by Mark Potter

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