Kazakhstan’s national oil and gas company KazMunayGas is looking to borrow cheaper funds from overseas debt issues, including bonds denominated in Chinese yuan, the firm’s chief executive Askhat Khassenov told Bloomberg.
“We looked at all options. Currently there is a possibility to sell dim sum, panda bonds,” Khassenov said in an interview with Bloomberg published on Wednesday.
KazMunayGas is also exploring opportunities to issue debt in Arab countries, as the company seeks cheaper borrowing terms, the executive added.
“Dim sum and panda bonds offer rather good conditions,” said Khassenov, referring to the yuan-denominated bonds outside mainland China and domestically in China, respectively.
If KazMunayGas decides to proceed with yuan bonds, this would be the first such debt sale in the Chinese currency for the Kazakh state oil firm.
Kazakhstan itself is raising its crude oil production regardless of its OPEC+ commitments, and openly defies the group by saying it wouldn’t cut production going forward.
As Kazakhstan has raised its production, it has become a major headache for the OPEC+ group, of which the country is part. Kazakhstan has defied production quotas and has been pumping well above its ceiling for years.
Kazakhstan cannot reduce its oil production as it has no right to impose output reductions on international firms that are operating more than 70% of Kazakhstan’s oilfields, Energy Minister Yerlan Akkenzhenov told Bloomberg last week.
Separately, Kazakhstan’s Deputy Energy Minister Alibek Zhamauov told Interfax last week that the country had already notified OPEC it would not cut its oil production.
“No, no, we won’t be revising [the compensation schedule], we have already told OPEC that we are not going to cut output and will be producing according to our capacity,” the Russian news agency quoted Zhamauov as saying last week.
This weekend, Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman said on Saturday they would boost July production by another 411,000 bpd, citing “current healthy oil market fundamentals and steady global economic outlook.”
By Tsvetana Paraskova for Oilprice.com