Kazakhstan outlook downgraded to reflect export curbs

Worldwide credit standing company S&P World Rankings has lowered its outlook on Kazakhstan to adverse, from steady, citing the Caspian Pipeline Consortium’s challenges in exporting oil to worldwide markets.

Kazakhstan has seen capability restriction points out of its management at its main oil export pipeline, operated by Caspian Pipeline Consortium, following Russia’s invasion of Ukraine in February.

The downgrade was motivated by an evaluation that the pipeline stays susceptible to potential disruption.

“The adverse outlook displays dangers to Kazakhstan’s oil exports by means of the Caspian Pipeline, in addition to rising debt financing prices,” the ranking company mentioned.

Caspian Pipeline Consortium carries 80% of Kazakh crude exports by way of its pipeline community throughout Russian territory to the export terminal at Novorossiysk

As the foremost export route for the important thing Kazakhstan’s Tengiz, Kashagan and Karachaganak oilfields — all three of that are operated by overseas consortia —the pipeline was not focused by Western sanctions imposed on Russia following the invasion of Ukraine.

Nonetheless, two out of three floating tanker loading buoys utilized by Caspian Pipeline close to the Russian Black Sea port of Novorossiysk had been broken throughout a storm in March and repairs had been reportedly affected by sanctions.

Then, in August, the consortium, which has Chevron, ExxonMobil, Shell and Eni amongst its stakeholders, mentioned it had been compelled to “quickly droop” crude shipments after cracks had been found in connections between subsea offloading hoses and submerged buoyancy tanks on the SPM-1 and SPM-2 mooring factors because of harm at “the attachment factors of underwater sleeves to buoyancy tanks”.

The tanks are anchored halfway between the buoys and seabed templates and serve to stabilise the oil feeding hoses throughout opposed climate circumstances.

Towards this backdrop, S&P World Rankings lowered its expectations for Kazakhstan’s annual oil manufacturing to 85.6 million tonnes in 2022 (1.8 million barrels per day), from a earlier estimate of 87.5 million tonnes.

Entry to grease export pipelines is essential to all native producers as a result of home consumption is restricted by the dimensions of nation’s inhabitants and the dearth of any robust financial development in Kazakhstan.

Kashagan technical points

In addition to points with Caspian Pipeline, Kazakhstan is anticipated to see decrease than deliberate output from its massive Kashagan offshore oil improvement challenge within the north of the Caspian Sea led by a bunch of worldwide oil majors.

Following upkeep work earlier this summer season, technical points have been recognized at slug catchers and compressors that deal with related bitter gasoline produced with the oil.

Vitality Minister Bolat Akchulakov was quoted by native press in Kazakh capital of Nur-Sultan as saying that repairs at a second compressor on Kashagan are anticipated to be full quickly, permitting oil manufacturing to develop to 200,000 bpd, nonetheless barely half of pre-maintenance ranges.

Kashagan is operated by North Caspian Working Firm, by which KazMunayGaz, Eni, Shell, ExxonMobil, TotalEnergies, China Nationwide Petroleum Company and Inpex maintain stakes.

Home expectations worsen

In one other setback, Kazakhstan authorities have forfeited about 9.2 trillion tenge ($19.5 million) in anticipated signature bonuses after the winners of three main licences at a current public sale failed to lift financing to again up their bids, in line with the nation’s Vitality Ministry.

The unpaid licences lined the Kamenistoye and Shalva oilfields, and the Zhalganoy exploration block — positioned within the nation’s Mangistau area which considered one of nation’s legacy oil province with nicely developed supporting infrastructure.

The Kamenistoye area was found within the early Eighties and lies subsequent to the big Zhetybay oil asset being developed by state owned oil and gasoline producer KazMunayGaz.

The Vitality Ministry didn’t reveal the indentity of the businesses that failed to supply the financing, however mentioned that the brand new house owners of the 18 different auctioned asset licences have made their funds, totalling about 11.9 trillion tenge.

The three unclaimed blocks can be provided on the subsequent public sale, the date for which has but to be set, the ministry mentioned.

Kazakh authorities have provided oil and gasoline property by way of on-line auctions since 2020 and have drawn curiosity from home firms.

Western firms have opted to steer clear of the auctions, regardless of acreage on provide mendacity near present blocks or positioned in potential areas.