Kazakhstan has committed to reduce oil production by 390 thousand barrels per day under the OPEC+ deal, implying major energy powers lowering their crude oil production by a total of 9.7 million barrels per day in May and June 2020.
At the moment, large oil reserves have been accumulated in Kazakhstan as a result of decrease in demand for oil, Toppress.kz correspondent reports citing a press release of the Ministry of Energy. As a consequence, there is a risk of overstocking of oil storage facilities in the second quarter of 2020, which may lead to emergency shutdowns of Kazakhstani oil fields.
To this end, the Ministry drew up a draft governmental decree “On introducing temporary restrictions on the use of subsoil plots for exploration and production and hydrocarbon production operations” with a list of individual subsoil plots where oil production will be limited in May and June this year. Among the fields that fall under restriction are giant, large and medium-sized oilfields,”the press release reads.
The Ministry emphasized that the rule will not apply to small deposits, since they are expecting natural decline in oil production due to economic factors.
The decree provides for a non-discriminatory approach to all oil producing companies, taking into account the needs of Kazakhstan’s domestic market, as well as fair distribution of obligations to reduce oil production both for large projects and old fields that are at the stage of natural decline in oil production, the statement says.
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