UPDATE 3-Kazakhstan sees 50 pct oil export growth by 2020

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04.10.2011 18:37

By Robin Paxton

ASTANA Oct 4 (Reuters) - Kazakhstan, Central Asia's largest oil producer, plans to raise annual crude exports to 110 million tonnes by 2020 from the 72 million tonnes forecast for this year, the country's oil and gas minister said on Tuesday.

Sauat Mynbayev said Kazakhstan's westward crude oil exports via an expanded Caspian Pipeline Consortium (CPC) would almost double by 2020. Shipments to China would also nearly double to 20 million tonnes from the 11 million tonnes forecast this year.

"Raising capacity to 20 million tonnes is only a question of building extra pumping stations (along the China pipeline)," Mynbayev told the annual Kazenergy conference.

Kazakhstan, Central Asia's largest economy, has more than trebled crude output over the past decade to become the second-biggest producer in the former Soviet Union after Russia. It produced 79.5 million tonnes of oil and gas condensate in 2010.

In a presentation to the conference, Mynbayev said Kazakhstan would produce 80.4 million tonnes in 2011, which would increase to 132.1 million tonnes by 2020.

"Kazakhstan is one of the few non-OPEC countries with the potential to substantially increase oil production in the next few years," Daniel Stein, senior adviser to the U.S. State Department's special envoy for Eurasian energy, told the conference.

As well as raising exports to China, Kazakhstan expects to boost its annual oil exports via the expanded CPC network to 52 million tonnes by 2020 from 28 million tonnes forecast in 2011.

Transneft , Russia's state-owned pipeline monopoly, owns 31 percent of CPC. The Kazakh state, U.S. major Chevron , ExxonMobil , Royal Dutch Shell (RDSa.L) and Russia's LUKOIL also have stakes.

"In the short to medium term, the CPC expansion now under way is essential," Stein said. "In the longer term ... there likely will be a need for additional export capacity to move the oil across the Caspian."


State oil and gas company KazMunaiGas plans to boost its crude output to 33.7 million tonnes by 2020 from this year's forecast of 22.1 million tonnes, Chief Executive Kairgeldy Kabyldin said.

Foreign oil companies also control a significant proportion of crude production in Kazakhstan, which holds slightly more than 3 percent of the world's recoverable oil reserves.

The Chevron-led Tengizchevroil venture is the country's largest oil producer, while Chinese companies control nearly a quarter of output -- a percentage that the government has said will drop below 10 percent by 2020.

Tengizchevroil (TCO) produced 25.9 million tonnes of crude in 2010, or approximately 567,000 barrels per day. A company official said in June that the consortium would invest up to $20 billion by 2016 to increase production.

"The second phase of the 'future growth' project (at TCO) is under way, with the possible increase of production from the current 26 million tonnes to 36 million tonnes," Mynbayev said.

The start-up of the Kashagan field in the Caspian Sea, run by another international consortium, will be the other main driver of the forecast growth.

Commercial production at the first phase of Kashagan is scheduled to begin by the end of 2012 or early 2013. Kabyldin said 93 percent of work at the offshore installations was already complete.

"Phase I of this project should produce around 370,000 barrels per day, with the possibility of increasing to 450,000 barrels," Mynbayev said.

The minister said he was confident that uncertainty over the project's larger second phase, which has effectively been frozen by disagreements over costs, could be overcome through negotiations between the state and the consortium partners.

The Kashagan consortium's members are Eni , Shell, Total , ConocoPhillips , ExxonMobil, Japan's Inpex and KazMunaiGas .

Industry sources told Reuters in June that ExxonMobil wanted to exit the Kashagan project and pointed to two state-run Indian energy firms as showing interest in acquiring the existing 16.8-percent stake belonging to the U.S. company.

Mynbayev said that, to date, none of the shareholders had officially expressed their intention to quit the consortium, although the authorities would be ready to consider such moves. (Additional reporting by Mariya Gordeyeva and Raushan Nurshayeva; editing by Miral Fahmy and James)