No plans to cut Kazakhstan’s Oil Production
Kazakhstan has no intention to cut back on levels of oil production in 2015, despite the affect on the country’s economy of the fall in oil prices since mid 2014. This mirrors the stance adopted by Opec last November, when the option of cutting production in an attempt to drive the oil price back up was rejected.
The Kazakh government, like governments in many other oil producing countries, is struggling to balance its economy due to the sustained fall in global oil prices and difficult economic situation in Russia, one of its principal trade partners. Although the country is rich in many other natural resources, the impact of the fall in oil revenue is likely to be significant. Nonetheless, Kazakhstan’s Energy Minister has confirmed that the oil production target remains the same as for last year at around 80 million metric tons.
As recently reported in our blog, the price of oil has fallen by more than half since June 2014 and is currently fluctuating around $50 a barrel. Oil had remained around $100 a barrel for the previous 4 years, ensuring a more comfortable margin for oil producing companies. When you factor in that the cost of oil production at some fields in Kazakhstan is quite high at around $50 a barrel, it’s easy the pressure this places upon oil producers. If oil production is to remain profitable, greater efficiencies and innovative cost reducing measures will no doubt be high upon their agenda.
The Energy Minister in fact confirmed in a briefing on 23 February that Kazakhstan had increased oil production by 0.8 percent over the period January 1st – February 20th, compared to the same period in 2014. This means that the country is on track to meet their target for oil production for 2015.
All of which is good news for innovative UK SMEs with the capacity to seize this opportunity. If your business has products/technologies which could be used in the oil, gas or construction sectors and you’re looking to export to new markets, or for the first time, get in touch for more information on how Kazopp can help. With a network of contacts and connections and knowledge of Kazakhstan built up over two decades, we are well placed to facilitate your export experience in Kazakhstan.