ExxonMobil Warns Tengiz Output Will Slump 40% by 2035
The warning comes tied to an $80 billion Kashagan expansion offer that Exxon says hinges on Astana clearing a $150 billion dispute and a $5 billion environmental fine.
ExxonMobil has told Kazakhstan's government that production at Tengiz, the country's largest oilfield, will plateau as soon as next year before sliding to around 500,000 barrels a day by 2035, a decline of roughly 40 percent from its peak, according to part of a company presentation made to authorities in Astana that was seen by Bloomberg and reported on Sunday (2026-08-23).6
The projection frames a supply problem Kazakhstan cannot defer. The country reached 2 million barrels per day in 2025, and Tengiz contributes the lion's share of that output. A sustained 40-percent fall at one field over the next decade, if not replaced, leaves a gap that no quick fix closes.5,6
Exxon has put an answer on the table, but with conditions attached. The company has proposed an $80 billion equal joint venture with state-owned KazMunayGas National Co. to develop the untapped western portion of the Kashagan reservoir, Bloomberg reported. At full build-out, the project could yield up to 600,000 barrels a day. That would more than replace what Tengiz loses — but only if the deal gets done.6
Exxon has made the investment contingent on Kazakhstan resolving a $150 billion dispute that international oil companies are pursuing against the government, as well as a separate $5 billion environmental fine that Astana has levied against the Kashagan consortium. Both remain unsettled. Without movement on either, the $80 billion commitment stays notional.6
Kashagan's history makes the conditionality credible. The reservoir's hydrogen sulfide concentrations and reservoir pressures have repeatedly kept production well below design capacity, and developing its western extension requires the kind of sustained technical commitment that is difficult to maintain through an unresolved nine-figure legal standoff. Astana will be aware that Exxon's position here carries weight.6
Kazakhstan's export infrastructure adds a separate layer of pressure. The Caspian Pipeline Consortium, which carries roughly 1.4 million barrels a day from Kazakhstan to Russia's Port of Novorossiysk on the Black Sea, halted loadings after a drone strike hit a tanker earlier this summer and only resumed on Monday (2026-07-27) after a week-long shutdown.5,1,2
The CPC stoppage was not a one-off. Kazakhstan is now weighing a partial reroute of crude exports through Azerbaijan, Georgia, and Turkey, using the Trans-Caspian and Baku-Tbilisi-Ceyhan network to reduce dependence on the Russian Black Sea corridor. No volumes or timelines have been confirmed for that diversion.3
Together, the CPC vulnerability and the Tengiz decline warning expose the depth of Kazakhstan's medium-term supply predicament. ICE Brent crude front-month was at $93.60 per barrel as of Sunday (2026-08-23), with prices elevated by supply disruptions around the Strait of Hormuz. A visible decline in Kazakh output over the coming years would add sustained supply pressure on top of existing near-term constraints.4,6
Exxon presenting the Tengiz decline alongside the Kashagan expansion pitch is a negotiating posture as much as an engineering update. The path to a term sheet runs through clearing the $150 billion dispute and the $5 billion environmental fine. Any sign that Kazakhstan is opening talks with competing partners for the Kashagan western block would materially change Exxon's leverage, and shift the urgency with which Astana moves on the outstanding legal disputes.6