NUR-SULTAN – Kazakhstan fulfilled its obligations in August under the Organization of Petroleum Exporting Countries agreement achieving 100 percent conformity, reported the Kazakh Energy Ministry press service.
In August, Kazakhstan’s average daily oil production stood at 1.345 million barrels. Kazakhstan fulfilled compensation deadlines set by the OPEC after the nation oversupplied in May and committed to compensating for it by additional cuts in August and September. Under the original agreement, Kazakhstan committed to cutting its oil production by 390,000 barrels per day.
Between January and July, Kazakhstan’s oil production made 51.5 million tonnes, which is 1.4 percent lower than in 2019. Oil exports, however, grew by 0.4 percent reaching 42 million tonnes.
Kazakh First Deputy Prime Minister Alikhan Smailov said the country’s budget was hurt from the oil production cuts, as oil revenues almost halved, losing 1.6 trillion tenge (US$3.8 billion).
In April, the 23-member group and non-OPEC oil-producing nations, including Kazakhstan and Russia, agreed to slash production by 9.7 million barrels a day in May and June, or ten percent of global oil output, the largest cut in the history, in an effort to stabilize the oil market and bring supply in line with the slump in demand caused by the coronavirus pandemic.
In June, the OPEC Joint Ministerial Monitoring Committee (JMMC), which meets monthly to review developments in the global oil market, extended the 9.7 million barrels cuts that were expected to end in June through until July 31. Production cuts tapered to 7.7 million barrels per day between August to December and will taper to 5.8 million barrels per day between January 2021 and April 2022.
At their last meeting in August, the committee commended the overall conformity which reached 97 percent in July and said achieving 100 percent conformity remains “not only fair but vital for the ongoing rebalancing efforts and to help deliver long-term oil market stability.”
The committee said there were signs of improvement, including a narrowing gap between oil demand and supply, but cautioned that the recovery might take longer than expected taking into account the risk of a prolonged COVID-19 second wave.
The next committee meeting is slated for Sept. 17.