2013-10-10 11:43:00 - New Energy market report from Business Monitor International: "Kazakhstan Oil & Gas Report Q4 2013"
We maintain our optimistic on Kazakhstan, although we continue to underline risks related to resource nationalism and geological complications on major prospects that could deter foreign investors. Kazakhstan's choice to block the sale of ConocoPhillips' Kashagan stake in order to allocate it to CNPC illustrates the uncertainty of the business environment that surround the country.
The main trends and developments we highlight for Kazakhstan's oil & gas sector are:
* Kazahstan has been strengthening its trading ties with China. Kairgeldy Kabyldin, head of KazTransOil, seems to have made a clear choice, as he declared in early March plans to increase oil exports to China by one-fifth in 2013. The decision to prioritise CNCP over ONGC for the acquisition of ConocoPhillips' Kashagan
stake supports the view that Kazakhstan is supporting a stronger integration with China.
* KazMunaiGas (KMG)'s acquisition of a 10% stake in the Karachaganak gas and condensate project for a total pre-tax consideration of US$3bn, including US$1bn in net cash and the settlement of outstanding legal claims against the operating consortium, is a positive move for the foreign companies involved. The deal removes many of the legal uncertainties surrounding their operations in the country and opens the door to the long-delayed third phase of development, which will boost output from the field.
* We forecast that the estimated 2012 gas output of 11.2bn cubic metres (bcm) will rise to 15.3bcm by the end of 2017. Infrastructure bottlenecks and delays to key decisions with regard to associated gas have forced us to moderate our assumptions. The country's exports are also declining. Our demand forecasts see consumption reaching 16.6bcm in 2017, creating increasing risk that the country will have to rely on imports.
* Output at Kashagan is set to start before the end of 2013 and is expected to reach about 370,000 barrels per day (b/d) during first-phase expansion and rise to 450,000b/d by 2015 or 2016. State oil and gas group KMG believes the Kashagan field expansion could be completed by 2018-2019. However, we decided not to include this in our forecast considering the significant risks of delays affecting field developments in the country.
* According to Oil and Gas Minister Sauat Mynbayev, oil output hit 80.10mn tonnes per annum (tpa), equivalent to 1.61mn b/d, in 2011. The government expects production to hit 90.00mn tpa, or 1.81mn b/d, by 2015, with production levels sustained at 120-130mn tpa (2.41-2.61mn b/d) from 2020 onwards. This is above our forecasts, which see output reaching 2.03mn b/d in 2016 and 2.26mn b/d in 2020.
* We forecast domestic oil demand will reach 263,000b/d by 2017. This implies that oil exports should rise from an estimated 1.39mn b/d in 2012 to 1.73mn b/d by 2017. BMI expects the country to fall short of the 2020 export target of 3.00mn b/d set by the government, with our forecasts suggesting exports of no more than 1.88mn b/d that year.
* In early April, the Kazakh government announced an impromptu export duty hike for oil producers. Prime Minister Serik Akhmetov signed the decree, which pushes the tax from about US$5.5 per barrel (bbl) to nearly US$8.2/bbl, with effect from April 13. We do not believe this move illustrates a growing trend of resource nationalism in the Kazakh oil sector. By increasing the cost of exports, the government incentivises producers to direct output toward domestic demand.
Full Report Details at
- www.fastmr.com/prod/689049_kazakhstan_oil_gas_report_q4_2013.asp ..
Partial Table of Contents:
BMI Industry View
- Industry Forecast
- Oil And Gas Reserves
- Table: Kazakhstan Proven Oil & Gas Reserves And Total Petroleum - Historical Data And Forecasts, 2011-2016
- Table: Kazakhstan Proven Oil & Gas Reserves And Total Petroleum Data - Long-Term Forecasts, 2017-2022
- Oil Supply And Demand
- Table: Kazakhstan Oil Production, Consumption And Net Exports - Historical Data And Long-Term Forecasts, 2011-2016
- Table: Kazakhstan Oil Production, Consumption And Net Exports - Long-Term Forecasts, 2017-2022
- Gas Supply And Demand
- Table: Kazakhstan Gas Production, Consumption And Net Exports - Historical Data And Long-Term Forecasts, 2011-2016
- Table: Kazakhstan Gas Production, Consumption And Net Exports - Long-Term Forecasts, 2017-2022
- Refining And Oil Products Trade
- Table: Kazakhstan Refining Production And Consumption - Historical Data & Forecasts, 2011-2017
- Table: Kazakhstan Refining Production And Consumption - Long-Term Forecasts, 2017-2022
- Key Risks To BMI's Forecast Scenario
Industry Risk Reward Ratings
- Kazakhstan - Risk/Reward Ratings
- Central And Eastern Europe - Risk/Reward Ratings
- Table: Central And Eastern Europe Risk/Reward Ratings
- Caspian Retains Lead In Upstream Ratings
- Russia Loses Monolith Position
- Regional Minnows Breaking In
- Table: CEE Upstream Risk/Reward Rating
- No Major Downstream Movements
- Table: CEE Downstream Risk/Reward Ratings
- Kazakhstan Energy Market Overview
- Overview/State Role
- Licensing And Regulation
- International Energy Relations
- Table: Kazakhstan - Upstream Projects
- Oil & Gas Infrastructure
- Oil Refineries
- Table: Downstream Projects
- Table: Major Refineries In Kazakhstan
- Oil Terminals/Ports
- Oil Pipelines
- Gas Storage Facilities
- Gas Pipelines
- Executive Summary
- Table: Key Players - Kazakhstan Oil And Gas Sector
- KazMunaiGaz (KMG)
- Eni Kazakhstan
- BG Kazakhstan
- ExxonMobil Kazakhstan
- Shell Kazakhstan
- Lukoil Kazakhstan
- Other Summaries
- Europe Energy Market Overview
- A Dependent Relationship
Full Table of Contents is available at:
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