Kazakhstan intends to significantly increase crude oil exports to China by redirecting some of the oil flows from Europe to the world’s largest oil importer, announced Deputy Minister of energy of Kazakhstan, Aset Magauov, in an interview published on Wednesday.
The Central Asian country, which is in the group of oil producers outside OPEC, in the framework of the agreement on production cuts OPEC +, plans to change the Kenkiyak-Atyrau oil pipeline to flow crude oil to the East with the current of the Western direction of the flow of oil, said the official. Reuters.
Kazakhstan will seek to increase its crude oil exports to China up to 6-7 million tons per year, compared with 1 million tonnes currently.
The export of Kazakh oil to the Chinese market fell from a peak of 11.3 million Tons in 2013 to just 1.3 million Tons in 2018. According to Magauov, the reduction of exports to China was mainly due to a natural reduction of oil fields in the South and the North-West of Kazakhstan. many of which are operated by Chinese oil companies.
Now Kazakhstan will seek to reverse the decline of Chinese exports using Kenkiyak-Atyrau eastward, thus linking more fields in Western Kazakhstan with domestic refineries, freeing up crude oil for export to the East.
Most of the oil for export to China, most likely, will come from small fields, and not from the giant Kashagan or Tengiz and Karachaganak, because Western oil companies that control these huge fields, I don’t want to sell in China, because they are not particularly Magauov told Reuters that a happy Chinese pricing formulas.
Kazakhstan is part of a group, not a member of OPEC, which has joined the efforts of OPEC to restore balance in the oil market and maintain the price of oil – have pledged to cut 40 000 barrels per day of its production and keep it at the level of 1.86 million barrels per day in the period from January to June. Kazakhstan, like all countries in the Pact OPEC +, pledged this week to maintain these reductions until the end of March 2020 .
According to the Ministry of energy of Kazakhstan, oil production in the country in the first half of 2019 amounted to an average of 1.79 million barrels per day, which means, according to the Ministry, Kazakhstan has exceeded its reduction, reducing production by 70,000 barrels per day compared to November 2018.