Kashagan Maintenance Shutdown and Potential Postponement

The planned 35-day maintenance shutdown at Kazakhstan's Kashagan offshore oilfield, scheduled to begin on June 1, would remove approximately 400,000 barrels per day (bpd) from international markets. However, foreign shareholders—including Eni, Shell, TotalEnergies, ExxonMobil, CNPC, Inpex, and KazMunayGaz—are considering postponing the turnaround due to persistently high global oil prices, which remain well above $100 per barrel despite a brief dip. Discussions with Kazakhstan's Ministry of Energy have taken place to explore this option, as continued exports could capitalize on elevated prices.

Impact on Oil Exports and Pipeline Logistics

If the shutdown proceeds, Kazakh oil exports via the Caspian Pipeline (CPC) are expected to drop to below 1.4 million bpd in June, down from an anticipated 1.7 million bpd in May. A reduced shipment schedule has already been approved by the energy ministry, limiting NCOC's flexibility to delay maintenance and sustain exports. The sudden price surge represents a potential windfall for investors, as the project remains in its cost recovery phase, allocating 80% of revenues to repay investments and 20% as profit oil shared among shareholders.

Financial Implications and Investment Context

Industry expert Nurlan Zhumagulov estimates that NCOC could earn up to $1.2 billion from Kashagan oil exports in June under current prices, while total shareholder investments have surpassed $50 billion. The operator, NCOC, has stated that maintenance details will be shared via its official channels but has not responded to follow-up inquiries.

Technical Scope and Risk Assessment of the Turnaround

The turnaround involves inspecting all vessels and units handling raw hydrocarbons, requiring isolation, cleaning, inspection, repair, and safe recommissioning of each vessel. Aidos Koldasov of KazService assesses the probability of a successful and timely turnaround as high, given NCOC's experience and past campaigns, though risks remain in commissioning, start-up activities, and synchronizing offshore and onshore infrastructure. Special attention will be given to inspecting the slug catcher at the Bolashak onshore facility, which separates incoming hydrocarbons. This follows a 2022 incident where hydrogen sulphide gas leaks were discovered at the slug catcher after annual maintenance, halting production resumption.