BAKU, Azerbaijan, Aug. 12
By Nargiz Sadikhova - Trend:
The crises of 2020 will exacerbate the challenges Kazakhstan already faced to compete for new investment from international companies, Ashley Sherman, Principal Analyst for Caspian oil and gas at Wood Mackenzie told Trend.
Sherman said that as in so many countries, the coronavirus pandemic has had far-reaching consequences for Kazakhstan’s energy sector.
“Beyond the pain caused by weaker market fundamentals – for operators, service companies and the national budget – there are other short-term and long-term effects to highlight,” Sherman said.
Firstly, he highlighted the ongoing short-term challenges.
In his words, labor-intensive construction sites are inevitably at acute risk during the pandemic.
“Tengizchevroil – Kazakhstan’s biggest operator – has been the location of one of the largest coronavirus outbreaks in the global energy industry. This has put even more pressure on the ability of Chevron and partners to deliver the $45+ billion FGP-WPMP [Future Growth Project – Wellhead Pressure Management Project] megaphase on schedule in 2022-23,” the analyst said.
Sherman added that lockdowns and transportation restrictions have also impeded logistics for other major capital projects in the Caspian region.
“In the longer term, the crises of 2020 will exacerbate the challenges Kazakhstan already faced to compete for new investment from international companies. Not only because of stricter investment criteria and an uncertain price outlook. But also because leading companies will continue to embrace the energy transition and rebalance portfolios away from higher-cost upstream themes,” Sherman emphasized.
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