Oil Major Chevron Could Be Forced To Cut Oil Production

Kazakhstan is in talks with the businesses operating its two sizeable offshore oil projects. To scale back total output by 22 percent in compliance. With the newest OPEC+ production cut agreement.

The Central Asian country’s cut quota under the OPEC+ deal was 390,000 bpd, from a complete daily production of some 1.3 million bpd. Most it coming from the Tengiz and Kashagan fields within the Caspian. Which last year accounted for a combined daily output of 900,000 barrels of crude.

The situation is atypical since a supermajor leads the consortia that operate Tengiz and Kashagan. the bulk partner in Tengizchevroil. Which operates the Tengiz field, is U.S. Chevron, which is additionally a partner within the North Caspian Operating Company, developing Kashagan. Until now, the 2 companies haven’t been involved in production cuts. This time, however, they weren’t just asked, but are close to comply with the cuts, consistent with Reuters sources.

Kazakhstan negotiating production

Kazakhstan isn’t alone in negotiating production cuts with private field operators. Neighbor Azerbaijan, with whom the country shares the Caspian Sea’s oil riches, asked an oil supermajor for help in achieving its share of the assembly cuts also . Azerbaijan asked the BP-led consortium that operates the Azeri-Chirag-Guneshli offshore field system to start out reducing its output from May.

Last year, the ACG group produced some 542,000 bpd. Now, BP and its partners would wish to scale back this by between 75,000 bpd and 80,000 bpd to fill the country’s reduction quota, which stands at 164,000 bpd.

OPEC and its partners, which besides Russia also include the Central Asian oil producers, agreed early this month to scale back its combined production by 9.7 million bpd to counter a dramatic drop by oil prices. the quantity to be cut, however, is nowhere near the loss in demand resulting from travel banks and lockdowns in response to the coronavirus pandemic. this means that along side deliberate cuts, there’ll be forced well shut-ins as barrels produced remain unsold, and space for storing runs scarce on a worldwide scale.

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