Article content

(Bloomberg) — Kazakhstan is seeking discussions with Ukraine after an attack by its drones on Russian territory affected flows through its important crude export conduit.

Article content

Article content

An oil pumping station on the Caspian Pipeline Consortium link, which ships about 80% of Kazakh oil exports, was halted after a drone attack Monday, possibly reducing flows by about 30% during about two months of repairs. The pipeline carries oil from Kazakhstan’s three largest fields, including the Tengiz project led by US oil major Chevron Corp., which just completed a $48.5 billion expansion project designed to boost production by about 260,000 barrels a day.

Article content

“This is a very important issue for Kazakhstan’s economy, and we, of course, will discuss this situation with our Ukrainian partners via diplomatic channels,” Astana-based Foreign Affairs Ministry spokesman Aibek Smadiyarov said by email Wednesday.

CPC carries crude through an onshore pipeline from Kazakhstan to a Black Sea tanker terminal near the Russian port of Novorossiysk. It also takes some Russian barrels, which enter the line at the Komsomolskaya pumping station near the Caspian Sea and at the Kropotkinskaya station, which was hit by Ukrainian drones.

Production from Tengizchevroil, the joint venture that operates the field, and its exports via CPC remain uninterrupted, a spokesperson for Chevron said Tuesday. 

Ukraine has been attacking Russian oil infrastructure in an effort to disrupt fuel supplies to invading forces and reduce the petroleum revenue that has bankrolled Moscow’s military aggression against the country. Most of its drones have targeted refineries, and Monday’s strike was the first to affect the CPC conduit. 

“Until the CPC attack, Ukraine had been careful (and advised repeatedly) not to strike energy infrastructure linked to Western energy companies,” Kate Mallinson, a partner at PRISM Strategic Intelligence Ltd. in London, said by email. “The risk of attacks on CPC, particularly during any upcoming negotiations over the war, will therefore remain high.”

Article content

Article content

It came just days after a telephone conversation between US President Donald Trump and Russian leader Vladimir Putin in which they discussed ending the war. This week, Russian and American officials met for a first round of talks and raised the possibility of broader cooperation — a process that, so far, has excluded Ukrainian President Volodymyr Zelenskiy and his European allies.

“Now that Ukraine sees Trump moving towards accommodation with Putin to the exclusion of Zelenskiy, the gloves are off,” Mallinson said. “However, the utility of attacks on CPC as leverage on the negotiations is questionable as it will cause anger in Washington and beyond.”

Putin Comments on Attack

The CPC facilities on the Russian territory weren’t protected by antimissile systems, Putin said in comments broadcast Wednesday on state-run Rossiya 24 TV. “We assumed it won’t be a target of an attack as strictly speaking it’s not a Russian facility, it’s part of international energy infrastructure.” The barrels shipped through the pipeline belong to Western producers, he said.

It will take a while before the damaged CPC facility receives the needed equipment and restores operations, Putin said. On Tuesday, Russia Deputy Prime Minister Alexander Novak estimated the repairs may take several months.

Article content

CPC crude has become an increasingly important supply alternative to Russian barrels for Europe. Since the invasion of Ukraine, it had suffered only brief interruptions, in the spring and summer of 2022, when Russian authorities said a storm damaged tanker-loading buoys.

Since then, Kazakhstan has been trying to diversify routes for its oil shipments, and this year it plans to send 1.5 million tons via the Baku-Tbilisi-Ceyhan pipeline, compared with 250,000 tons in 2022, when shipments started.

The central Asian nation also plans to send 1.2 million tons of crude to Germany via Russian pipelines. However, those volumes are dwarfed by the 63 million tons it sent via CPC last year.

—With assistance from Sherry Su and Julian Lee.

(Updates throughout with comments from Putin, analyst)

Article content