Page 11 - FSUOGM Week 03 2022

FSUOGM POLICY FSUOGM

Kazakh oil and gas reforms lie ahead

KAZAKHSTAN KAZAKHSTAN is preparing to implement a QazaqGas. It is hoped that this will ensure that
number of proposals that will affect the oil and gas is sold at a low price on the domestic market
Kazakhstan is gas market in the wake of its worst unrest since while being exported at a high price. A spike in
proposing changes independence, law firm Unicase reports in a the domestic price of LPG, used commonly in
to both upstream research note. Kazakhstan as a vehicle fuel, sparked the nation-
and downstream First, the government has proposed selling wide protests and rioting seen in the country
regulations. oil on the domestic market through commodity earlier this month.
exchanges, which it hopes will increase transpar- Upstream, the government plans to intro-
ency in the sale of crude by producers to refin- duce a direct government financial interest in
eries. Kazakhstan has long struggled with the large oil and gas projects to boost its revenues.
theft and illicit trade of oil, and this has at times And it also wants to cancel the priority right
contributed to domestic shortages. to subsoil use of state-owned KazMunayGas
Kazakhstan also intends to liberalise domes- (KMG). KMG has demonstrated over the last
tic oil refineries by bringing them into the whole- 20 years that it cannot launch projects success-
sale fuel market. It says this will help them boost fully on its own, Unicase said, and stripping
their revenues and reduce their debts. it of its priority right should help attract new
The government also wants to transfer regula- investors, particularly from the West, the gov-
tion of the LPG market to state-owned company ernment expects. ™

NEWS IN BRIEF

Kazakh authorities change daily needs) filling stations, gas supply lubricating oils 8,500tonnes, petroleum
pipeline networks, gas-filling units and
bitumen 8,800 tonnes, petroleum coke
mechanism for wholesale gas-filling stations received this right,” the 9,500 tonnes.
Currently, there is only one refinery
statement said.
sales of LPG operating in Azerbaijan - the Baku Oil
Refinery named after Heydar Aliyev (part of
The Kazakh authorities have decided to sell SOCAR increased production the structure of SOCAR).
liquified petroleum gas (LPG) according to
requests made by local governing bodies of gasoline by 8% and diesel
instead of selling it via an electronic trading Gas exports from Shah Deniz
platform, which was the case earlier, the press by 16% in 2021
service of the Kazakh prime minister said in a increased by 1.4 times in
statement. The production of oil products in
The change forms part of the Kazakh Azerbaijan in 2021 compared to 2020 2021
authorities’ attempt to regulate LPG prices increased in monetary terms by 13.4% to
in order to appease protesters who rallyied AZN4bn ($2.5bn) according to the latest Exports of Azerbaijani gas from the Shah
against growing fuel prices. It was such report released by the State Statistics Deniz field in 2021 amounted to 17.6bn cubic
protests in early January that were the Committee. metres, which is 43.6% higher than in 2020,
first sign of the mass social unrest that According to the report, during the according to the State Statistics Committee.
subsequently swept Kazakhstan for several specified period the production of motor The share of gas exports from the Shah Deniz
days. gasoline amounted to 1.2mn tonnes (an field accounted for 50.2% of the total volume
In December 2021 and January 2022, increase of 7.9%), straight-run gasoline of gas transported through main gas pipelines
retail sellers purchased LPG via the electronic (naphtha) was 400,700 tonnes (an increase in the reporting period.
trading platform at wholesale market prices, of 67.2%), diesel fuel was 2mn tonnes In general, Azerbaijan’s main gas pipelines
the press service noted. On January 5, the (an increase of 16.2%), fuel oil 105,000 transported 35 bcm of gas in 2021 (an
authorities set a price ceiling on retail sales of tonnes (an increase of 70.5%), lubricating increase of 18.6%). Gas from the Shah Deniz
LPG. oils 49,100 tonnes (an increase of 39.1 field is currently exported to Georgia, Turkey
“It has been decided to sell liquified %), petroleum coke 255,300 tonnes (an and Europe.
petroleum gas out of the electronic trading increase of 29.7%) The contract for the development of the
platform - through the plan of supplies to The production of petroleum bitumen Shah Deniz field was signed in Baku on June
the domestic market on the basis of requests amounted to 362,200 tonnes (a decrease of 4, 1996 and ratified by Parliament on October
of local governing bodies. The rules for 3.4%), jet fuel 490,100 tonnes (a decrease of 17 of the same year. The participants of the
the formation of the plan on the supply of 2.4%). Shah Deniz project are: BP (operator, 28.83%);
liquefied petroleum gas to the domestic As of January 1, 2022, finished products in Petronas (15.5%); SOCAR (16.67%); Lukoil
market have been amended, stipulating an the warehouses of the Baku Oil Refinery (10%); NICO (10%); TPAO (19%). At the
expansion of the list of entities authorised (BNPZ) in the form of stocks are: motor same time, Petronas has agreed to sell its stake
to buy LPG outside of the electronic trading gasoline - 33,100 tonnes, naphtha 800 in the project, which will be bought by Lukoil
platform. Apart from petrochemical tonnes, jet fuel 16,300 tonnes, diesel fuel (9.9%), SOCAR (4.35%) and BP (1.16%).
enterprises and group reservoir units (for 83,500 tonnes, heating oil 12,100 tonnes, The deal is scheduled to close by the end of

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