Kashagan Oilfield Scheduled Maintenance and Global Impact

Kazakhstan's second-largest oilfield, Kashagan, will halt production for over four weeks starting June 1, 2025, for scheduled maintenance. The operator, North Caspian Operating Company (NCOC), will shut down offshore facilities and the onshore processing plant, with the turnaround expected to be completed within 35 days. This outage will reduce Kazakhstan's crude exports by an estimated 400,000 barrels per day throughout June and early July.

Market and Economic Consequences

The shutdown will tighten global oil markets amid soaring energy prices caused by ongoing shipping restrictions in the Strait of Hormuz. Kazakhstan supplies nearly 13% of the European Union's crude oil imports (as of 2025), making the outage significant for European supply. Additionally, the downtime will further undermine Kazakh output, exports, and government revenues in the first half of 2025, following a prior disruption at the country's largest field, Tengiz, which experienced a fire-related suspension and curtailment for about four weeks in the first quarter.

Export and Production Details

Most Kashagan oil is exported to Europe via the Caspian Pipeline Consortium (CPC) pipeline, linking western Kazakhstan to a marine terminal near Novorossiysk, Russia. Exports of Kazakh CPC Blend crude are expected to drop to below 1.4 million barrels per day in June, down from a record high of 1.7 million bpd scheduled for May. The Tengiz field's first-quarter output fell to 45 million barrels, over 29 million barrels less than the same period in 2024, resulting in an estimated $900 million loss in Kazakh state revenues.

Technical and Operational Context

NCOC introduced biennial maintenance shutdowns at Kashagan in 2022 due to increased technical complexity. The facilities handle pressurized hydrocarbon output with high levels of corrosive and poisonous hydrogen sulfide, which must be extracted before sale. The associated gas re-injection equipment also requires servicing. The Kashagan turnaround occurs as Kazakh authorities push operators of western fields—Tengiz, Kashagan, and Karachaganak—to adhere to production schedules after a major drop in exports and revenues in early 2025.

Stakeholders and Background

NCOC's foreign shareholders include Eni, Shell, ExxonMobil, TotalEnergies, China National Petroleum Corporation, and Japan's Inpex. The Tengiz field's fire at a power facility in late February shut in production for about a month, contributing to the first-quarter output decline. Upstream has contacted NCOC for comment on the maintenance plan.