BAKU, Azerbaijan, May 1
By Nargiz Sadikhova - Trend:
Kazakhstan’s Ministry of Energy has developed a plan for oil production decrease within the framework of OPEC+ agreement, Trend reports with reference to the ministry.
The ministry said that due to a significant surplus of oil reserves on the background of a decrease in oil demand both in the world and in Kazakhstan, there is a risk of overstocking in oil storage tanks in 2Q2020 and emergency shutdowns of Kazakh oil fields.
Therefore, the ministry has prepared a government decree draft which includes a list of certain subsoil plots the oil production on which is to be limited May and June this year.
“Production restrictions apply to medium, large and giant fields. The list of subsoil plots did not include small and very small oil deposits as a natural decline in production is expected on these fields due to economic factors,” the ministry said.
The ministry also said that the decree is of a non-discriminatory approach to all producing companies as it takes into account the needs of Kazakhstan’s local market for petroleum products, as well as covers fair distribution of obligations to reduce oil production for both large oil projects and old fields which face natural decline in production.
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.
The extraordinary meeting of OPEC+ ministers was held on Apr. 12, 2020, following which the agreement to reduce oil production by 9.7 million barrels a day was signed for the period of two months starting from May 1, 2020.
Kazakhstan, in its turn, has supported the consensus in the agreement having taken the liability to decrease oil production by 390,000 barrels a day.
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