The government of Kazakhstan is talking with the supermajors operating its oil fields to reduce production in line with the OPEC+ agreement to which the Central Asian country is a party.
Kazakhstan has been one of the most consistent laggards, alongside Iraq and Russia, but now it is trying to reverse the trend and make up for the excess production by cutting around 620,000 barrels daily.
“We are in phases of discussions with the majors, we are having an open dialogue,” energy minister Almasadam Satkaliyev said, as quoted by Reuters, during this week’s CERAWeek conference. The remarks follow reports from last month that Kazakhstan had pledged to reduce oil production in each of the months to May to compensate for the excess.
For this month, the production quota for the Central Asian country is 1.5 million barrels daily, according to deputy energy minister Alibek Zhamauov. That would be down from a record-high 2.12 million barrels daily, registered for February, which was a 13% increase on the January average.
Reports from OPEC saying the group would proceed with its planned partial rollback of the production cuts in April sent oil prices plummeting, but nothing is certain. Last week, Russia’s top OPEC+ man, Deputy Prime Minister Alexander Novak said that the group may change its mind about the rollback if the market is unfavorable for such a move.
“There is no final decision (on that) and it depends on the situation with the market,” Kazakhstan’s Satkaliyev confirmed at CERAWeek.
OPEC+ plans to add some 138,000 barrels daily to its combined output beginning in April, even though several members have been overproducing, including, besides Kazakhstan, Nigeria, whose output last month was 70,000 bpd above its quota. The group cited a “healthier market” as basis for its decision. This may yet change, however, as Brent slid below $70 per barrel this week.
By Irina Slav for Oilprice.com
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