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Kazakhstan: Labor Dispute Dragging Energy Production Down

Employees with KMG EP walk past oil tanks at a storage depot in western Kazakhstan. (Photo: KMG EP)

An industrial dispute in western Kazakhstan that is dragging on into its sixth month is casting a shadow over the Central Asian state’s all-important energy sector.

Fresh forecasts suggest that the strike is having a significant, negative impact on oil production, and could undermine Kazakhstan’s efforts to join the ranks of the world’s top 10 oil producers. KMG EP, the London Stock Exchange-listed exploration and production arm of the state energy firm KazMunayGaz (KMG), reported recently that it produced 9.2 million metric tons of crude oil during the first three quarters of 2011, 7 percent less than during the same period last year. For the entire year, underproduction is forecast to reach 1.15 million tons, an amount that is 8.4 percent below target.

“Illegal industrial action” has “negatively affected” output figures, KMG EP acknowledged in an October 10 statement

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Joanna Lillis is a freelance writer who specializes in Central Asia.

Kazakhstan: Labor Dispute Dragging Energy Production Down

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