Market Trends of Kazakhstan Oil and Gas Upstream Industry
This section covers the major market trends shaping the Kazakhstan Oil & Gas Upstream Market according to our research experts:
Onshore to Dominate the Market
- The Kashagan reservoir is the leading onshore field, in the country, The production remains low due to the reservoir containing high levels of hydrogen sulfide, which are both highly toxic and highly corrosive.
- More than 100 billion cubic feet per annum (bcf) of natural gas was produced from the onshore fields. Natural gas produced in Kazakhstan increase by 4.1% from 2.3 bcf/d, in 2017 to 2.4 bcf/d, in 2018.
- Natural gas is being reinserted into the reservoirs to increase the production of the oil in reservoirs like Kashagan, thereby decreasing the overall gas production and increasing oil production.
- In Kazakhstan, natural gas production increased, by 4.1%, to 21 million tons of oil equivalent (Mtoe) in 2018 from 20.1 Mtoe in 2017. Consumption of natural gas increases, by 22.4%, to 16.7 million tons of oil equivalent (Mtoe) in 2018 from 13.7 Mtoe in 2017. Increasing demand for gas is boosting the growth in the market.
- Hence, onshore oil and gas fields are expected to dominate the market due to oil and gas basins being concentrated under the surface and economic viability of the these oil and gas fields.
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Increase in Oil Production to Drive the Market
- In 2018, oil production increased by 2.67%, year on year, from 18.9 Million tonnes oil equivalent (mtoe) in 2015 to 21 mtoe, in 2018. Increased Investment in oil projects by the government is the most prominent reason for the increase in oil production in the country.
- Kazakhstan's primary export oil grade is the Caspian Pipeline Consortium (CPC) Blend. CPC Blend is of light quality with an API of 45.3° and sweet crude (0.56% sulfur) which is of high value for its high yield of gasoline and light distillates. Most of the CPC blend is produced from the Tengiz field.
- The expansion project is expected to be added in the Tengiz field (Onshore) with an increase in capacity for production of 260,000 barrels per day of crude production expected to begin in 2022.
- Hence, as the oil production is expected to dominate the market owing to its large production. It is also likely to be a driver for the market.
