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Energy Sector Update for 03/14/2018: CVX

Kazakhstan looks set to continue ignoring its output restraint commitment as part of the non-Opec cohort in the Saudi Arabia/Russia-led Group of 24 producers supposedly restraining oil output.

Kazakhstan had agreed under the deal, which took effect in January of last year, to cut just 20,000 bpd from its Oct. 2016 baseline production of 1.805m bpd. But it produced at 1.92m bpd and 1.95m bpd in Dec. and Jan., respectively, according to the IEA, monitoring the "secondary sources" which are reference point for the deal.

In Opec's latest monthly report today, the cartel reckons Kazakhstan -- far from being a compliant participant in the deal -- will be one of the "key drivers" of non-Opec growth this year, adding another 80,000 bpd on average, having shown the third-largest incremental growth last year (170,000 bpd) after the US and Canada.

The former Soviet republic is prioritizing its giant Tengizchevroil expansion plan, which accounts for about 37 per cent of the $87 billion of global oil projects approved since the 2014 oil price collapse. The Chevron-led project will increase output 260,000 bpd to around 1m bpd by 2022, making it one of the world's most prolific oilfields, according to Rystad, a consulting firm.

(First Oil reports are produced by MT Newswires' global team of oil reporters. This story is also disseminated in real time to energy industry professionals via the First Oil Chat service on the ICE Instant Message application.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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