Page 12 - Kazakh Outlook 2025

outages at Karachaganak and limitations at the Orenburg gas processing plant. Kazakhstan's adherence to OPEC+ production limits, set at 1.468mn barrels per day (bpd) for 2024, also influenced these projections. The country has faced challenges in maintaining compliance, often exceeding its quotas. Despite renewed pledges to compensate for overproduction, Kazakhstan has generally continued to slightly exceed its output commitments.
Kazakh Prime Minister Olzhas Bektenov directed the Energy Ministry in December to ensure production aligns with the country’s target of 97.2mn tonnes in 2025. This represents an increase of 9.4mn tonnes, or approximately 190,000 bpd, way above the 41,000 bpd increase permitted for 2025 under OPEC+. Additional cuts to compensate for past overproduction may further limit the country’s allowed output growth. But as mentioned above, Kazakhstan has historically failed to comply with OPEC+ commitments.
Looking ahead, Kazakhstan aims to increase oil production to over 100mn tpy by 2026, driven by developments Tengiz, Kashagan and Karachaganak, Satkaliyev said. The expansion at the Tengiz field, operated by Chevron, is particularly noteworthy. Plans are under way to boost output to 850,000 bpd by mid-2025, up from recent records of approximately 699,000 bpd.
Mining
The mining sector accounts for approximately 4-5% of Kazakhstan’s GDP and stands as the second biggest sector that contributes to the economy after oil.
The sector is dominated by a few large companies that mainly produce steel and copper (other metals such as gold, silver and zinc make up a smaller share of the sector).
Kazakhstan’s main steel producer Qarmet (formerly ArcelorMittal Temirtau) aims to increase steel output to 3.5mn tonnes in 2024, a 13% y/y rise on 2023, and plans to boost iron ore concentrate production by 10% to 10mn tonnes, while coal production is set to decrease by 2%.
The country’s main copper producer KazMinerals reported total copper production of 287,000 tonnes in 9M24, a decrease from 301,000 tonnes recorded in 9M23. This decline was primarily attributed to anticipated reductions in ore grades at both the Aktogay and Bozshakol mines. It is likely that copper output in 2024 will register at a slightly lower volume than in 2023.
According to media reports from August, Kazakhstan was contemplating the introduction of export taxes on raw materials, including metals and fuels, as a measure to address a growing budget shortfall. Prime Minister Olzhas Bektenov was reportedly reviewing a proposal from the Finance Ministry to implement fixed-rate duties on the exports, according to sources cited by Bloomberg in August. Key commodities like sulphur, coal, ferroalloys, as well as copper and iron ores and concentrates, were expected to generate substantial revenues if the plan was to go forward. It is unclear if such export duties are still under consideration. S&P Global cited Commodity Insights
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