31 May 2015
Integrated Oil
US Integrated Oils
Caspian Sea, ex Russia
Production from the Caspian Sea is largely concentrated around a few mega
projects in Kazakhstan and Azerbaijan (with smaller contributions from
Turkmenistan and Uzbekistan). The recent reduction (25%) in the Kazakhstan
oil export duty this past March was not much of a surprise as the government
had announced its intention to reduce rates in response to the lower oil price
environment earlier this year. With the drop in export duty rates, the
government aims to sustain longer-term production by bridging the near-term
incremental production (weighted toward recovery projects) with the restart of
Kashagan Phase One and ultimately growth from the currently unsanctioned
Tengiz and Kashagan Phase Two projects. In Azerbaijan, the focus will be on
maintaining production at the ACG contract area (-75% of 2014 country
production) through the recently on-stream through the Chirag Oil Project and
a renewal of the underlying PSC that is set to expire in 2024.
Figure 33: Caspian Production Outlook, 2014-2020e Figure 84: Production by type (area chart of onshore vs.
shallow vs, deepwater (hiltykl)
3500 •I 3500
3003 3000
2500 2500
2000 2000
1500 1500
1000 • 1000
500 500
0 0
2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 20t9 2020
sOnshore (Com) "Shallow water (Com)
•Base •Growth Bbls
Source Dens* 0n, Weed44$04ena Sector, Dens Brit 1500:144stArin Z4
Figure 85: Crude volume growth outlook by project Figure 86: 2017 Production Swing (Bear vs. Bull) of -120
status (Mb/d) Mb/CI
so) 2600
ar
WO 2700 2011
26el I=1
25C0 2500
2000
MOO
1500
62500.
1000
1900
500
1700
0
2014 2015 2016 2017 201$ 2016 2020
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Deutsche Bank Securities Inc. Page 4/
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