The Organization of Petroleum Producing Countries (OPEC) is formed by 13 members, some of them very powerful in the world of crude oil. In addition, in 2016 another even more powerful group was born (it was the union of Russia), called as OPEC+which adds 10 more countries to reach a total of 23. Of all the countries that make up this ‘megacartel’, the movements of the most important stand out in the news and analysis, which are the de facto leaders of the organization and those who really have the capacity to move the market: Saudi and Russia Arabia, especially. However, sometimes there are also talk of some less important members, but also have their influence (second -order powers within the cartel), such as Iran, Iraq or even United Arab Emirates. However, this time the great protagonist is a country almost that it does not usually ‘make a lot of noise’, except this time: Kazakhstan. In addition, to go more to detail, within this ‘almost unknown’, a single oil field is relevant, which is bringing the big cartel head. Kazakhstan is producing historical crude records thanks to The revolution that is living the huge and deep ten.controlled by the American Chevron and whom the OPEC+ wants to put a ‘plug’ to stop spitting so much raw.
Before telling the story of this fascinating oil site, it is worth understanding what is happening in the OPEC+ and Why from Russia have threatened to reverse the planned production increasesall totally related to the Tengiz and Kazakhstan site. The alarms jumped last week when the Vice Primer Russian Minister, Alexander Novak, said Friday that the OPEC+ group could reverse the confirmed decision in February to increase oil production. Why was OPEC+ to reverse this plan that will allow them to sell more oil after years of cuts? After the intense falls that the price of ‘black gold’ is suffering in international markets, the cartel threatens to resume these cuts to reduce the offer in the market and raise prices.
The truth is that oil has collapsed more than 13% since the maximums reached in mid -January. Why has crude fallen so much? The reasons are many (more supply in America, a demand that grows more slowly …), but Novak’s looks and part of the OPEC+ were in Kazakhstan (and their great site)country that is producing record amounts of oil by jumping to the large fees (the limit that each country of the cartel can produce) imposed by the OPEC+.
Kazakhstan, the country without coastline in the world, has been producing at a record level, and well above its quota, thanks to the impulse of the American oil company Chevron (with the help of the large local oil company) that It is expanding with new phases the production in the largest kazajo oil fieldthe Tengiz site. This has generated great controversy. Several members of the cartel, including the main producer, Saudi Arabia, have been angry at the increase in Kazakhstan production, as they have revealed to Reuters Three OPEC+sources. Here the data. The Kazakhstan production fee in the OEPC+ is set at 1,468 million barrels per day (BPD). Kazakhstan increased production in February to a record of 2.12 million BPD.
A huge site in everything
The great culprit of this detour is Tengiz, the great site of the country. Tengiz site is one of the most deep ‘giant’ giant ‘giants’, With the top of the deposit about 4,000 meters deep. The site is also 20 kilometers wide by 21 kilometers long. The oil column measures an incredible 1.6 kilometers thicknessaccording to the data they handle Tengizchevroil and Chevron.
The Daily oil production at the Tengiz Site in January increased to 870,000 barrelsaccording to a press release published by the Ministry of Energy of Kazakhstan. “In January, the daily production of oil in Tengizchevroil (TCO), the operator together with Chevron (each has 50%) of the largest oil field in Kazakhstan, reached 870,000 barrels,” he said in the press release. The Ministry said that this figure is 45% higher than the average level by 2024. Well, it is believed that in February the production could have increased even more, exceeding 900,000 barrels of oil every day. What is happening in Tengiz to increase the production so much?
The oil company Chevron announced at the end of January the start of oil production in its future Growth Project (FGP), a key expansion within the Tengiz site. “This milestone represents a crucial step in the optimization of one of the deepest and largest oil fields in the world, with the expectation of increasing production until reaching a million barrels of oil equivalent to the day,” said the firm’s statement.
THE TENGIZ REVOLUTION
The FGP becomes the third processing plant in operation in Tengiz, incorporating advanced capacity reinjection capabilities of acidic gas, which will improve efficiency and increase production. According to The company’s statement, this extension seeks to raise crude oil in 260,000 barrels more newspapers once it reaches its maximum capacity (until reaching or exceeding one million barrels per day). However, it seems that Tengiz has already approached a lot to the million daily barrels, generating great controversy within the OPEC+ and putting the cartel strategy to the limit. Kazakhstan has sprayed its production quota … It is not that it has passed in a few thousand barrels, it has produced 600,000 barrels more every day. Or now a severe correction arrives by this former Soviet Republic or the credibility of the OPEC+ will be questioned.
To try to avoid major evils, at an almost simultaneous press conference with Novak’s, Kazakhstan officials went out to the forefront to publicly compromise to reduce oil production in March, April and May. Industry sources have assured Reuters that the record production of Kazakhstan could be about to modify the decision of the OPEC+ (rather than modify, reverse) to open the oil taps gradually adding 138,000 barrels of crude oil more every month. From the Kazakhstan government they have assured that they will cut their production, but they have not clarified whether they will compensate them at all or will only return to their quota. These have been the words: “In March, we will strive to reach the OPEC+ quota of around 1.5 million BPD.”
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