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Oil production may steadily decline in Kazakhstan over the next decade: KazMunaiGas Vice Chairman

07 november 2014, 17:28
Photo courtesy of RIA Novosti
Photo courtesy of RIA Novosti

Vice Chairman of the Board of the National Company KazMunaiGas Daniyar Tiyesov has declared that Kazakhstan may face a  decline in its oil production should no new oil fields be discovered in the next decade, Tengrinews reported from the November 5 meeting of Nur Otan faction in the Mazhilis, the lower chamber of the Kazakhstan Parliament.

Tiyesov was explaining why the construction of the fourth oil refinery in Kazakhstan was called off and instead the output of the Shymkent Oil Refinery would be increased.

"The fact is that the overall balance of petroleum products in a country is like an average temperature in a hospital. And the increase in the total consumption of petroleum products is uneven throughout the country; it is closely linked to the demographic situation in the country. There are only two options for the oil products: either to be sold at the domestic market or be exported," Tiyesov said.

He pointed out that at the domestic market consumption grew primarily in the Southern areas of Kazakhstan, where the Shymkent Oil Refinery was located.

"Oil is easier and cheaper to transport than oil products. This is why a refinery needs to be built where the consumers are. It appears that future increase needs to be planned in the Southern region,” he said.

A more serious issue concerns the raw material with which to supply the refinery.

"The situation in our country may completely change in the next 10 years if no new fields are discovered. The share of old fields in the total volumes of oil production will steadily decline,” Tiyesov declared.

“In 10-12 years about 80 percent of all the oil production will come from only three projects: Tengiz, Karachaganak and Kashagan. They have fixed contracts. Therefore, there is a question of what to fill our oil refineries with, not only the new one but also the existing ones. We are already beginning to face this issue," he stressed.

By Dinara Urazova

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