Low oil price will test Kazakhstan's finances

Thursday, January 29, 2015

Significance

Falling oil prices have the potential to cause further political instability and to strain Kazakhstan's energy-dependent finances. On January 16 Astana announced that it was revising its budgets for 2015-17 to mirror an oil price of 50 dollars per barrel. The current 2015-17 budget is based on an oil price of 80 dollars per barrel. In 2015 Kazakhstan will produce 80.5 million tonnes of oil or about 1.86 million barrels per day (b/d), according to Energy Minister Vladimir Shkolnik.

Impacts

  • Low price may hamper government's plans to conduct geological operations and limit future upstream projects investments.
  • Social unrest in Mangistau province and other areas of western Kazakhstan remains a risk.
  • Domestic petrol price may increase as Kazakhstan still imports a third of its demand from Russia.
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