Kazakhstan must pursue oil export options outside of Russia: Investor

Kazakhstan’s ability to diversify its seaborne crude oil export routes away from Russian territory is critical to the country’s economy, the developer of an alternative port told CNBC.

“I believe it’s less political, more existential question, and we hope that also international community is going to support that initiative to have alternative routes in order to minimize the effects of any supply shortages,” Nurzhan Marabayev, CEO of Kazakh infrastructure investor Semurg Invest, told CNBC’s Dan Murphy and Hadley Gamble.

His company has been working to develop the Kuryk port on the eastern coast of the Caspian Sea — a project that includes a bulk cargo terminal, designed for the transshipment of oil, bulk oil cargo and liquefied petroleum gas. 

Once complete, the port could provide an alternative to Kazakhstan’s main seaborne crude oil export route, which currently transports volumes across Russian territory via the 1,511-kilometer (939-mile) Caspian Pipeline Corporation’s pipeline, for later shipment from the CPC terminal near Russian port Novorossiysk.

Since Moscow’s full-scale invasion of Ukraine last year, concerns have mounted that Kazakhstan’s reliance on cooperation with Russia — with whom Kazakhstan shares a 7,644-kilometer (4,750 miles) border and a history of close political alignment — could endanger its oil supplies. Exports from the CPC terminal were intermittently disrupted in 2022, with Russia citing technical and regulatory issues. This included a delay in the port’s restart after storm damage, while Russian technical watchdog Rostekhnadzor carried out an unscheduled inspection, and a brief and unenforced Russian court ruling for CPC to halt exports for 30 days.

“Approximately 95% of oil is going through Russian territory, and we have seen some disturbance last year, and actually … it’s quite a threat to the Kazakhstan economy, because we are depending on the oil revenues,” Marabayev told CNBC on Wednesday.

Oil major ExxonMobil — which holds a 16.8% interest in the Kasahagan field and a 25% stake in the Tengizchevroil consortium that operates the Tengiz and Korolev fields — signaled similar concerns in a Feb. 22 securities filing.

“In the event that Russia takes countermeasures in response to existing sanctions related to its military actions in Ukraine, it is possible that the transportation of Kazakhstan oil through the CPC pipeline could be disrupted, curtailed, temporarily suspended, or otherwise restricted,” the company said, warning of a “loss in cash flows of uncertain duration” under such circumstances. ExxonMobil’s after-tax earnings linked to its Kazakh interests were roughly $2.5 billion in 2022.

Kazakhstan is the second largest producer of the non-OPEC contingent of the OPEC+ coalition and has typically aligned itself with Russia in the group’s petropolitics. Kazakh output slipped to 1.66 million barrels per day in January, according to the February issue of the…