Kazakhstan Orders Postponement of Kashagan Oilfield Turnaround to 2027

The government of Kazakhstan has directed the operator of the Kashagan oilfield, the country's second largest, to delay a long-planned maintenance turnaround from 2026 to 2027. This order was issued just two days before the field was scheduled to begin the process on 1 June. The Kashagan field, located in the shallow waters of the Caspian Sea, is expected to continue producing approximately 400,000 barrels of oil per day during this period.

Geopolitical and Market Context

Almost all of Kashagan's output is exported to Europe and international markets. This production is particularly significant given that oil prices are hovering around $90 per barrel due to ongoing issues with marine traffic in the Strait of Hormuz and the Iran conflict.

Official Directive and Rationale

According to a letter from the Kazakh energy ministry to North Caspian Operating Company (NCOC), signed by deputy energy minister Kayyrkhan Tutkyshbayev on 30 May, relevant governmental authorities have begun implementing conditions to postpone the turnaround. The decision was ordered by Kazakh Prime Minister Olzhas Bektenov, with instructions communicated to the ministries of energy, ecology and environmental resources, and emergency situations.

Impact on Contractors and Operations

The postponement has left dozens of contractors in limbo, as they had already mobilized equipment, machinery, and personnel to Kashagan's onshore and offshore sites. In a separate letter, NCOC managing director Giancarlo Ruiu stated that the decision was not taken lightly, reflecting operational, market, and geopolitical considerations, including the current energy market environment and long-term business priorities.

Continuity and Future Plans

Production at Kashagan will continue at current levels, with no plans for a full shutdown of offshore or onshore facilities this year. All preparatory work completed to date will be preserved and carried forward into the 2027 turnaround programme. A dedicated team has been established to coordinate demobilization activities safely and efficiently.

Consortium Shareholders

Shareholders in the Kashagan consortium include Eni, Shell, TotalEnergies, ExxonMobil, China National Petroleum Corporation, Japan's Inpex, and Kazakh state-run oil and gas holding KazMunayGaz. Upstream has contacted NCOC for further comment.