Central Asia Oil and Gas Upstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Central Asia Oil and Gas Upstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Central Asia oil and gas upstream market is expected to register a CAGR of over 3.5% during the forecast period, 2022–2027. The COVID-19 pandemic has negatively affected the market. For instance, in January 2022, due to concerns about the omicron variant of the coronavirus, oil prices in the Kazakhstan country increased by 5% after the government protested train lines and hit production at the country's Tengiz oilfield. Factors such as plans to improve oil production are expected to drive the growth for the market during the forecast period. However, oil production has decreased slightly over the past few years due to technological constraints and government regulations. This, in turn, likely to restrain market growth during the forecast period.

Key Highlights

• Onshore projects are expected to remain the most utilized of the deployment locations as they provide for cheaper access to the oil resources.
• There have been significant oil discoveries in countries like Turkmenistan and Kazakhstan. Economically feasible oil extraction may become an opportunity for the companies and may lead to a boom in oil production.
• Kazakhstan is expected to dominate the market, owing to the increase in oil and natural gas productions.

Key Market TrendsOnshore Segment to Dominate the Market

• In Central Asia, most of the economically viable oil and gas fields in the country are situated inland. Many countries, such as Kazakhstan, is the largest economy in Central Asia and home to more than 18 million people. The country is rich in coal, oil, natural gas, and uranium. The country has seen significant growth in its exploration and production activities in recent days.
• Oil production in the region has grown around 2.4% respectively, in the past five years. Although Kazakhstan produces some gas, most of it is re-injected to enhance oil recovery locally. On the contrary, most of the gas produced by Turkmenistan and Uzbekistan is exported to China, Russia, and Azerbaijan.
• Moreover, Kazakhstan's primary export oil grade is the Caspian Pipeline Consortium (CPC) Blend. CPC Blend is of light quality with an API (American Petroleum Institute) gravity of 45.3° and sweet crude (0.56% sulfur), which is of high value for its high yield of gasoline and light distillates. Most of the CPC blend is produced from the Tengiz field.
• In November 2021, the Chevron-led consortium that operates the Tengiz Oil field had begun an early production from a USD 45 billion expansion project intended to lift output to 850,000 b/d. Tengizchevroil consortium had brought on stream three metering stations producing 100,000 b/d connected to new wells drilled as part of this expansion.
• Owing to the above points onshore segment is expected to dominate the market during the forecast period.

Kazakhstan is Expected to Dominate the market

• Kazakhstan was the world's ninth-largest exporter of crude oil and 12th of natural gas as of 2021. As of december 2021, natural gas exported by Kazakhstan was 15,101.000 million cubic meters. The increase was primarily due to demand from Russian Federation and China.
• Natural gas production increased by 14.03%, i.e., from 27.8 billion cubic meters in 2010 to 32.7 billion cubic meters in 2021. Consumption of natural gas increased by 22.06%, i.e., from 9.5 bcm in 2010 to 15.1 bcm in 2021. Therefore, increasing demand for natural gas is boosting the investments within the country.
• In 2021, the Ministry of Energy, Kazakhstan announced USD 116.8 million for the implementation of 146 oil and gas projects across the country. The allocated budget is utilized for the extension of gas networks, providing access to gas for around 10,388 thousand people within the country.
• Moreover, in June 2021, Kazakhstan started the construction of a new gas processing plant in the Makat district in the Atyrau region, near the existing onshore Bolashak oil and gas treatment complex. The project has an investment cost of USD 860 million and has a capacity to process 1 billion cubic meter/year of sulfur dioxide from the Kashagan field.
• Hence, increasing investments in the oil and gas industry are expected to drive the market due to the addition of fresh capacity. An increase in the demand from neighboring countries like the Russian Federation and China is also expected to boost the market during the forecast period.

Competitive Landscape

The Central Asia Oil and Gas Upstream Market is moderately consolidated. The major companies include National Company JSC (KazMunayGas), Chevron Corporation, Karachaganak Petroleum Operating BV, Gazprom International Limited, and PJSC Lukoil Oil Company.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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