Kazakhstan's Oil Production Plummets by Nearly 20% in Q1

Kazakhstan has reported a significant decline in oil production for the first quarter of the year. The country's Vice Minister of National Economy, Azamat Amrin, stated that economic growth this year will be achieved without a positive contribution from the oil sector.

From January to March, overall production in the mining industry fell by 11.4%. This drop was primarily driven by a sharp 19.8% decrease in crude oil extraction and a 15.1% reduction in natural gas output.

Despite these declines in the extractive industries, Kazakhstan's real GDP grew by 3% over the same period. Notably, the share of the oil sector in the nation's GDP has halved compared to previous levels.

Energy Minister Yerlan Akkenzhenov linked the downturn in oil and gas performance to operational issues at key projects. He cited specific challenges at the Caspian Pipeline Consortium (CPC) and the Tengiz field as major contributing factors.

During the reporting period, total production of oil and gas condensate reached 19.7 million tons, which represents just 80.2% of the volume produced in the same period last year.

Minister Akkenzhenov provided updates on ongoing efforts to stabilize output. At the Karachaganak field, work continues on commissioning a sixth raw gas re-injection compressor. This project is crucial for maintaining annual oil production at a level of 10-11 million tons.

The government is also engaged in negotiations with major subsoil users to discuss concrete measures aimed at increasing oil extraction rates.

The forecast for total oil exports this year stands at 76 million tons.

In related market developments, global oil prices have been rising following recent geopolitical statements concerning key shipping routes like the Strait of Hormuz.

The price for June Brent crude futures on London's ICE exchange surged by over 7%, surpassing $102 per barrel. Similarly, May WTI crude futures saw an increase of more than 8%, reaching approximately $105 per barrel.