BAKU, Azerbaijan, Jun. 19
By Nargiz Sadikhova - Trend:
Kazakhstan may face challenges for a series of large offshore oil and gas projects in the Kazakhstani sector of the Caspian Sea, Head of Analysis at PRISM Political Risk Management Ben Godwin told Trend.
Talking possible effects that OPEC+ agreement extension can potentially have on Kazakhstan, Godwin said that the agreement has already helped to restore oil prices, which will to some extent shore up the government budget and maintain Kazakhstan’s National Fund.
“It will also to some extent support the tenge, helping the spending power of the population,” he said.
However, Godwin noted there is a structural challenge in the global oil industry in that with the advent of US shale oil and now what is set to be a protracted recovery from the coronavirus pandemic, oil prices across the board are set to remain relatively low.
“This presents challenges for a series of large offshore oil and gas projects in the Caspian Sea that Kazakhstan is seeking to get off the ground. In the context of long term oil price uncertainty and also the global energy transition, investors are set to be skeptical of large, long-term, capital intensive projects such as the Caspian Sea fields,” he said.
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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