By Olesya Astakhova, Mariya Gordeyeva and Maha El Dahan
MOSCOW/ALMATY/DUBAI (Reuters) -Russia Deputy Prime Minister Alexander Novak said on Friday that the OPEC+ group agreed to start increasing oil production from April, but could reverse the decision afterward if there are market imbalances.
Speaking at an online briefing almost simultaneously with Novak, officials from Kazakhstan, which has frequently exceeded the OPEC+ production quotas, pledged to cut output in March, April and May.
Novak also said Russia produced less oil in February than the quota it agreed to with the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies.
Eight members taking part in OPEC+’s most recent layer of output cuts held a virtual meeting on Monday and agreed to proceed with the April increase, the first by the group since 2022. The increase is 138,000 barrels per day, according to Reuters calculations.
Novak told reporters that the group will go ahead with the April increase, but after that it may consider other steps.
“If there is an imbalance in the market, we can always play in the other direction,” he said.
Global oil prices rose more than $1 a barrel after his comments. [O/R]
KAZAKHSTAN
Industry sources told Reuters that record output from Kazakhstan helped sway this week’s OPEC+ decision.
The world’s largest landlocked country has been producing at a record high, and well above its quota, as U.S. oil major Chevron expands output at the largest Kazakh oilfield, Tengiz.
The Chevron-led Tengizchevroil (TCO) consortium operates the Tengiz and Korolev fields. Tengiz, one of the world’s deepest oilfields, was discovered in 1979.
Chevron holds a 50% stake in TCO, while KazMunayGaz has 20%, ExxonMobil (25%) and Lukoil (5%).
Another country’s large oil project, Kashagan, is operated by the North Caspian Operating Company (NCOC) that includes Eni (16.81%), Shell (16.81%), TotalEnergies (16.81%), ExxonMobil (16.81%), KazMunayGaz (16.88%), Inpex (7.56%) and China National Petroleum Corp (8.33%).
Shell declined comment, while Chevron said: “Tengizchevroil has safely started initial production from the Future Growth Project (FGP). Once all Tengiz facilities are operating at full capacity, TCO’s total annual crude oil production is expected to reach approximately 40 million tons per annum. Beyond this, TCO does not comment on specific details of current or future production levels.”
Several members of the OPEC+ group, including top producer Saudi Arabia, were angered by the rising output from Kazakhstan, three OPEC+ sources told Reuters.
Kazakhstan Energy Minister Almassadam Satkaliyev told an online briefing of reporters and analysts that the country was producing oil above quota, but the government had tasked oil majors to cut production.
His deputy, Alibek Zhamauov, said that the country will cut oil production in March, April and May, as well as exports via the Caspian Pipeline Consortium (CPC), its main exporting route.
Kazakhstan’s OPEC+ production quota is set at 1.468 million barrels per day (bpd).
“In March, we will strive to achieve the OPEC+ quota of about 1.5 million bpd,” he said.
Kazakhstan raised crude and gas condensate output in February to a record-high 2.12 million bpd.
A pumping station on the Russian stretch of the CPC pipeline was hit by a Ukrainian drone last month. There have been conflicting reports about the scale of the damage and its impact on exports.
Zhamauov said CPC has embarked on repair works and while exports have been steady, they will decrease in March. He didn’t specify if the cuts will be due to the aftermath of the drone strike or output reduction.
(Writing by Vladimir Soldatkin; Editing by Tomasz Janowski, Emelia Sithole-Matarise and Mark Porter)
