Oil pumps in the Uzen oil and gas field in the Mangistau Region of Kazakhstan, on Nov. 13, 2021.PAVEL MIKHEYEV/Reuters
Top Western oil companies face a hit to revenue as disruptions at a Russian Black Sea port force producers to curtail output from Kazakhstan’s giant oil fields, highlighting the growing global supply risk after Moscow’s invasion of Ukraine.
Chevron CVX-N, Exxon Mobil XOM-N, Shell SHEL-N, TotalEnergies TTE-N and Italy’s Eni are among international companies with stakes in Kazakhstan’s oil fields.
More than 80 per cent of the central Asian country’s crude is exported via the Caspian Pipeline Consortium (CPC) pipeline to the port of Novorossiisk, supplying around 1.2 per cent of global oil demand.
The port’s operator shut down two of the three berths at the CPC export terminal on Wednesday, blaming damage from a recent storm, although loadings were partially resuming from one on Thursday.
Chevron, the operator of Kazakhstan’s largest oil venture Tengizchevroil (TCO), on Friday said it was reducing output owing to the unscheduled repair work at Novorossiisk.
The company would not provide details on the size of the output cuts.
And storage at the CPC terminal was nearing full capacity, traders said.
Sources with knowledge of the terminal said they believed it was unlikely the site’s berths were significantly damaged by the storms, which have been built to withstand severe weather, pointing instead to Russian politics in the face of heavy Western sanctions.
Russian energy officials do not usually comment on the CPC pipeline, which is run by an international consortium. A spokesperson for Chevron, which operates the CPC pipeline, earlier declined to comment on the reason for the shutdowns.
The 1,511 kilometre-long pipeline exports around 1.1 million barrels per day, the equivalent of around $140-million based on current oil prices. Its owners also include Exxon, Eni, Shell, domestic energy company KazMunayGas and Russian pipeline operator Transneft.
The barrels include the roughly 700,000 barrels a day produced from TCO, in which operator Chevron holds a 50 per cent stake while Exxon holds 25 per cent.
CPC is also the main export route for the Kashagan oil field with production of about 400,000 bpd.
It was unclear if output was reduced at the Kashagan and Karachaganak oil fields.
TCO accounted for more than 10 per cent of Chevron’s production last year at 338,000 barrels per day. For Exxon, Kazakhstan accounted for 210,000 bpd in 2020, almost 10 per cent of the company’s total oil output.
Shell declined to comment. Exxon, Eni and TotalEnergies did not respond to a request for comment.
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