Kazakhstan says Tengiz could reach full oil production within a week

By Tamara Vaal, Vladimir Soldatkin and Anton Kolodyazhnyy

ASTANA/MOSCOW, Jan 28 (Reuters) - Kazakhstan said on Wednesday it was restarting the huge Tengiz oilfield in stages, aiming to reach full production in a week after three unexplained electrical fires earlier this month cost it 7.2 million barrels of oil.

Kazakhstan has faced multiple disruptions over the past two months after a Ukrainian naval drone knocked out a mooring point for its main export pipeline on the Black Sea, and then the three transformer fires shut down Tengiz for a week.

Reuters reported on Tuesday that Tengiz, the jewel in the crown of the Kazakhstan oil industry, is likely to have restored less than half of its normal production by February 7 as it recovers from the fires and power outage.

Energy minister, Yerlan Akkenzhenov, said the adjacent Korolev field had been launched two days ago but that relaunching Tengiz was complicated after three out of 30 transformers burned down.

RESTORATION OF TRANSFORMERS HAPPENING IN STAGES

"Three of them have burned down - this is critical equipment," Akkenzhenov told reporters in Astana, adding that restoration of the transformers was being done in stages.

"The first gas has already appeared, so I think the entire Tengiz will be launched in stages within a week. Maybe even earlier."

Asked if he thought the field would reach capacity of around 900,000 barrels per day within a week, he said: "Yes. We will try. You understand, this is not a simple question."

The cause of the fires was not known and an official commission was investigating them.

Two industry sources were sceptical, telling Reuters on condition of anonymity that the field was unlikely to reach such output levels within a week.

One said output would likely remain just above two-thirds of usual production until the end of February. The second source confirmed that interpretation.

TENGIZ FIELD

The Tengiz field, in western Kazakhstan along the shore of the Caspian Sea, along with the Korolev field, is estimated to have recoverable crude of around 11.5 billion barrels.

Chevron, a developer of the field since 1990, ranks it as the world's deepest producing super giant oilfield, and said extraction would be technically challenging.

Chevron's subsidiary in Kazakhstan, TCO, the operator of Tengiz, said on Wednesday production had restarted after power was restored.

"TCO is working to progressively increase output as conditions allow," it said, adding "TCO does not comment on specific details of its operations."

Chevron embarked on a $48 billion expansion of Tengiz in early 2025 meant to raise production to around 1 million barrels of oil equivalent per day, just under 1% of global oil output, but export constraints have set back those efforts.

CPC DAMAGE ESTIMATES

Akkenzhenov said the output issues at Tengiz and the attack on the Caspian Pipeline Consortium (CPC), which accounts for 80% of Kazakhstan's oil exports, would push Kazakhstan back within the OPEC+ agreed production boundaries.

"I think that we are going just within the stated volumes," he said.

The shutdown at Tengiz and Korolev, he said, had led to a loss in production of about 900,000 tonnes of oil (7.2 million barrels), though lost volumes would be made up and overall Kazakh production would not be affected in annual terms.

The CPC damage lost Kazakhstan 3.8 million tonnes of exports, he said.

Separately, trader Vitol's Asia head said on Wednesday that Kazakhstan is estimated to have lost more than 40 million barrels of crude exports from damage around the CPC.