For the Kazakhstani economy, which is extremely dependent on the oil industry due to the fact that about 80% of produced oil is exported, the current crisis has certainly become a difficult test. In addition to the forced reduction in oil production, the spread of COVID-19 imposes restrictions on the activities of oil companies, which has already led to a reduction in investments and a decrease in employment in the industry.
In the past two years, oil production in Kazakhstan has exceeded 90 million tons annually. Until that time, oil production had stagnated for a long time – since 2010, annual production has been about 80 million tons on average. The situation has changed radically after the launch of Kashagan in autumn 2016, which allowed to increase production to current levels. At the same time, declining oil prices and Kazakhstan's participation in the OPEC+ agreement to limit production are holding back the ability to further expand oil production. In addition, planed repairs are scheduled at Tengiz and Karachaganak in the second half of the year, which will lead to a decrease in oil production. As a result, this year the Ministry of Energy assumes that oil production will decrease by about 7% yoy to 84.5 mn tons.
