APRIL 21 2015 (The Conway Bulletin) – Tengizchevroil, Kazakhstan’s largest oil producer and one of its most successful post-Soviet energy projects, said that it was slowing expansion plans in response to the drop in global oil prices.
The announcement is yet more disappointing news for Kazakhstan. It is trying to cope with a sharp economic downturn triggered by the combined impact of the fall in oil prices and also the Western-imposed sanctions on Russia which have had a knock-on effect in the rest of the former Soviet Union.
“Global oil prices have dropped significantly, so we responded by slowing the project down and cutting spending for 2015,” reports quoted Aidar Dosbayev, head of production at Tengizchevroil, as saying at a conference.
Tengizchevroil is vitally important to Kazakhstan. It wants to become one of the world’s top energy producers although the much-delayed Kashagan project has dented its ambitions. And the delay in starting up Kashagan has meant Kazakhstan’s oil output hinges on Tengizchevroil.
Tengizchvroil had said it planned an expansion that would boost output to 38m tonnes of oil a year by 2019, up from around 27m tonnes.
The oil price drop, though, has slowed planes, Mr Dosbayev said.
“Although we slow down the pace of the project and reduce costs, our commitments to Kazakhstan remain unchanged,” he said.
In the short-term, though, Kazakhstan’s income from the project will be reduced and job creation will be limited.
Chevron owns 50% of Tengizchevroil, ExxonMobil owns 25%, Kazmunaigas owns 20% and Lukoil owns 5%.
ENDS
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(News report from Issue No. 228, published on April 22 2015)