Kazakhstan commits to reducing oil production after April. Russia claims OPEC+ could reverse output.
Alexander Novak, the deputy prime minister of Russia, said that the OPEC+ had agreed to increase oil production starting in April. However the group could change its mind if market imbalances occur.
Officials from Kazakhstan, who have often exceeded the OPEC+ production quotas in recent years, spoke at a briefing online almost simultaneously with Novak. They pledged to reduce output in March April and May.
Novak said that Russia also produced less oil than the quota agreed with the OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
A virtual meeting of eight members who took part in the most recent layer cutbacks by OPEC+ was held on Monday. They agreed to move forward with the April production increase, which is the first since 2022. Calculations show that the increase amounts to 138,000 barrels a day.
Novak, a reporter for the New York Times, said that Novak's group would continue with the April increase but may take other steps afterward.
He said that if there was an imbalance on the market, they could always go in the opposite direction.
After his comments, the global oil price rose by more than $1 per barrel.
KAZAKHSTAN
Sources in the industry said that the record production from Kazakhstan helped to influence this week's OPEC+ decisions.
Tengiz, the world's biggest oilfield in Kazakhstan, is being expanded by U.S. oil giant Chevron.
Tengizchevroil, a consortium led by Chevron, operates the Tengiz-Korolev fields. Tengiz is one of the deepest oilfields in the world. It was discovered in 1979.
Chevron owns 50% of TCO. KazMunayGaz holds 20%, ExxonMobil (25%), and Lukoil (5%) each have a stake.
The North Caspian Operating Company, which includes Eni (16.81%) Shell (16.81%) TotalEnergies (also 16.81%) ExxonMobil (also 16.81%) KazMunayGaz (also 16.88%) Inpex (7.56%) and China National Petroleum Corp (also 8.33%) operates another country's major oil project.
Shell refused to comment. Chevron stated: "Tengizchevroil's initial production of the Future Growth Project has been safely launched." TCO's annual crude oil production will reach 40 million tonnes when all Tengiz installations are fully operational. TCO will not provide any further details on current or future production levels.
Three OPEC+ source told us that several members of the OPEC+, including Saudi Arabia as the top producer, were angry about the increasing output from Kazakhstan.
Almassadam Satkaliyev, Kazakhstan's Energy Minister, told reporters and analysts in an online briefing that although the country produced oil over quotas the government had instructed oil majors on how to reduce production.
Alibek Zhamauov said the country would cut its oil production and exports in March, April, and May. Its main export route is the Caspian Pipeline Consortium.
Kazakhstan's OPEC+ quota has been set at 1.468 billion barrels per day.
He said that in March they would strive to reach the OPEC+ quota, which is about 1.5 million bpd.
In February, Kazakhstan increased crude and gas condensate production to a new record of 2,12 million bpd.
Last month, a drone from Ukraine hit a pumping station along the Russian section of the CPC pipe. The extent of the damage to the pipeline and its impact on the exports has been reported in conflicting ways.
Zhamauov stated that CPC is undertaking repair work and exports, while they have been stable, will decrease in march. He did not specify whether the reductions will be due either to the drone strike's aftermath or a reduction in output. (Writing and editing by Tomasz Janowski, Emelia Sithole Matarise, Mark Porter).
(source: Reuters)
