Caspian Oil Exports to Drop as Giant Oilfield Undergoes Maintenance

On April 18, 2024, 4:20 AM

Exports of the CPC blend from the Black Sea via the network of the Caspian Pipeline Consortium (CPC) are expected to drop by 12% in May compared to the scheduled shipments for April, due to a planned oilfield maintenance, Reuters reported on Wednesday, citing sources with knowledge of the matter. 

CPC blend exports are seen down to around 4.9 million metric tons in May, compared to 5.4 million tons planned to be exported in April, according to Reuters’ sources.

The expected decline in exports is because of the planned maintenance of the giant Tengiz oilfield in Kazakhstan, which is operated by the Tengizchevroil consortium led by Chevron.

The U.S. supermajor holds a 50% interest in Tengizchevroil (TCO), the operator of the Tengiz oilfield, the world’s deepest producing supergiant oil field and the largest single-trap producing reservoir in existence.

The CPC pipeline runs from the Caspian coast in northwest Kazakhstan to the Novorossiysk port on Russia’s Black Sea coast and carries 80% of Kazakh crude exports.

It wasn’t immediately clear when the maintenance at the Tengiz oilfield will begin or how long it will take, the sources told Reuters.

The price of CPC Blend cargoes loading for May has already increased, due to the expected drop in export volumes.

The lower exports from Kazakhstan could further tighten the market as demand rises ahead of the summer.

Meanwhile, Kazakhstan exceeded its oil production quota under the OPEC+ deal by 131,000 barrels per day (bpd) in March, due to the weather and heating season requirements, the country’s Energy Ministry said this weekend, pledging that the non-OPEC producer will look to compensate in the coming months for its overproduction.

“Kazakhstan will continue to make every effort to comply with its obligations and compensate for the 1st quarter overproduction,” the Kazakh Energy Ministry said in a statement.