Kazakhstan says 105pc compliant with Opec+ in June

Kazakhstan's crude production was over 20,000 b/d below its 1.32mn b/d Opec+ quota last month, according to figures released today by the country's energy ministry. It marks a sharp turnaround from May when the country exceeded its cap by around 110,000 b/d.

Kazakh crude output fell by 9pc on the month to just under 1.3mn b/d in June from 1.43mn b/d in May, the energy ministry said. This gives a compliance rate of 105pc last month, compared with 71pc in May, it said.

The available data suggest that the ministry has used 7.3-7.4 bl/t to convert its output from tonnes to barrels. Argus uses a 7.58 bl/t conversion factor for Kazakh crude production.

Kazakhstan has been under mounting pressure to adhere to its output ceiling after the Opec+ group agreed at its last ministerial meeting that non-compliant members would have to make up for surplus production in May and June with additional cuts in July-September. Energy minister Nurlan Nogayev said last month that Kazakhstan will compensate for its excess production with steeper cuts in August-September.

Kazakhstan's output cap rises to just under 1.4mn b/d in August-December under the current deal. But Nogayev's pledge means that the country will have to produce below that in August-September in order to make up for May's surplus.

The energy ministry declined to elaborate on the compensation plan today, but confirmed that "production in August-September is planned at a level which is sufficient to compensate for overproduction in previous months".

Kazakhstan produces a significant amount of condensate, which is excluded from the Opec+ deal. The country's total crude and condensate output was 7.18mn t in May, according to the IACOG state monitoring agency. Based on crude figures from the energy ministry, condensate made up around 16pc of May's total. Kazakhstan's largest source of condensate output is the Karachaganak field.

By Anastasia Krasinskaya and Daniyar Mussaev