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

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

The market for oil and gas in Kazakhstan is expected to grow at a CAGR of less than 2.94% during the forecast period of 2020 – 2025. Factors, such as increasing natural gas pipeline, increasing refining capacity and plans to improve oil production are expected to drive the growth for the Kazakhstan oil and gas market, during the forecast period. However, the largest oil and gas field in the country has a high composition of hydrogen sulfide, thereby increasing the cost of refining.

Key Highlights

• The upstream sector is expected to increase substantially in the forecast period due to the continued focus on improving oil and gas production. Kazakhstan also has one of the largest oil fields in the world, which can boost growth in the sector.
• There have been significant oil discoveries in southern Kazakhstan. Economically feasible extraction of the oil may become an opportunity for the companies and may lead to a boom in oil production.
• Investment in the oil and gas industry has continued with heavy focus on increasing of gas processing and refining capacity. Increase in consumption is expected to aid the growth in the industry.

Key Market TrendsUpstream Sector to Experience Significant Growth

• In 2018, oil production increased by 2.67%, year on year, to 21 mtoe, in 2018 from 18.9 Million tonnes oil equivalent (mtoe) in 2015. Increased Investment in oil projects by the government is the most prominent reason for the increase in oil production in the country.
• Kazakhstan's primary export oil grade is the Caspian Pipeline Consortium (CPC) Blend. CPC Blend is of light quality with an API 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 2018, an expansion project is expected to be added in the Tengiz field (Onshore) with an increase in capacity for production of 260,000 barrels per day of crude production expected to begin in 2022.
• Hence, upstream is expected to grow substantially owing to its increase in oil production in the forecast period.

Increasing Investment in the Oil and Gas Industry to Drive the Market

• Natural gas exported by Kazakhstan, by pipeline, increased by 93% to 25.6 bcm, in 2018 from 13.2 billion cubic meters (bcm), in 2017 primarily due increase in demand from Russian Federation and China.
• In Kazakhstan, natural gas production increased, by 4.1%, to 21 million tons of oil equivalent (Mtoe) in 2018 from 20.1 Mtoe in 2017. Consumption of natural gas increases, by 22.4%, to 16.7 million tons of oil equivalent (Mtoe) in 2018 from 13.7 Mtoe in 2017. Increasing demand for gas is boosting the growth in the market.
• In 2018, Construction of oil refinery worth approximately 420 USD million, in West Kazakhstan, and is expected to be constructed by 2021. The plant is expected to produce 750,000 tons of refined products a year.
• In 2019, Kazakh firm GPC invest is expected to build an 860 million USD gas processing plant near the Central Asian nation's biggest oilfield, Kashagan. The plant is expected to process 1 billion cubic metres of gas per year using feedstock from Kashagan.
• Hence, the increase in investment is expected to drive the market due to the addition of fresh capacity. An increase in the demand from the neighbouring countries like the Russian Federation and China is also expected to provide boost to the market.

Competitive Landscape

The Kazakhstan oil and gas market is moderately consolidated. The major companies include National Company JSC (KazMunayGas), Chevron Corporation, Karachaganak Petroleum Operating B.V., PJSC Gazprom, and PJSC Lukoil Oil Company.

Additional Benefits:

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

Companies Mentioned

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