BAKU, Azerbaijan, March 18
By Nargiz Sadikhova - Trend:
Kazakhstan’s revenue from oil and gas export will decrease by three times, Chairman of the Presidium of Association of oil service companies of Kazakhstan Rashid Zhaksylykov said, Trend reports with reference to Kazakh media.
Zhaksylykov said that a volatile situation is currently observed at the oil market.
“If over past two years, oil provided over one trillion tenge ($2.3 billion) to the state budget, coronavirus outbreak will provide for a sharp decrease in oil consumption worldwide,” he said.
Zhaksylykov explained that in the case that oil prices reach $25, the export tax will reach zero and payments to the budget of oil companies will also be decreased to zero.
“In the case that current oil prices maintain, deficit of Kazakhstan’s budget may reach 1.2 percent of GDP, whereas revenue to the budget from oil export could drop by three times,” he said.
He added that improvements on the global oil market are not expected in the near couple of months.
“There is also a possibility that no improvements will be observed in the next one or two years,” he said.
On the morning of March 9, 2020, Brent crude plunged 25 percent dropping to its lowest since February 2016 and recording the biggest one-day percentage declines since Jan. 17, 1991.
Trading volumes in the front-month hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on March 6, 2020.
At the end of 2018, OPEC and a number of non-affiliated countries (Kazakhstan being one of them) decided to extend the agreement on reducing oil production, which has been in force since the beginning of 2017. The countries agreed to reduce their production by a total of 1.2 million barrels per day from the level of October 2018.
Thus, latest liabilities of Kazakhstan within the agreement were 1.843 million barrels a day compared to 1.86 million barrels a day previously.