US Treasury Lifts Sanctions on CPC and Tengizchevroil: A Strategic Move for Oil Exports

On May 15, 2025, the US Department of the Treasury announced the removal of anti-Russian sanctions affecting the Caspian Pipeline Consortium (CPC) and the Kazakh company Tengizchevroil. This decision facilitates the resumption of operations previously restricted in January 2025, including the procurement of oilfield services from foreign firms. The announcement was made via the department’s press service, which published license No. 124 on its official website. This action is viewed as a crucial step to ensure the uninterrupted export of Kazakh oil, of which the CPC accounts for over 80%, and to sustain operations at one of the world’s largest oil fields, Tengiz.

The primary rationale for lifting the sanctions is attributed to the significant involvement of Western shareholders in both entities. The CPC is partially owned by major American corporations, with Chevron holding 15%, ExxonMobil 7.5%, and Eni 2%, alongside interests from other international firms such as Shell and BP. Tengizchevroil is predominantly controlled by American investors, with Chevron owning 50% and ExxonMobil 25%. The remaining shares are held by Kazakhstan’s KazMunaiGas (20%) and Russia’s LUKOIL (5%). The presence of these large American corporations was instrumental in the Treasury’s decision to ease restrictions, aiming to safeguard the interests of Western investors and maintain stability in the global oil market.

The CPC project is vital for transporting oil from Western Kazakhstan’s fields, including Tengiz, Karachaganak, and Kashagan, to the marine terminal in Novorossiysk. In 2024, the pipeline transported 63 million tonnes of oil, with contributions of 26.82 million tonnes from Tengiz, 17.21 million tonnes from Kashagan, and 9.82 million tonnes from Karachaganak. This activity represents approximately 80% of Kazakhstan’s total oil exports, underscoring CPC’s critical role in the nation’s economy. Tengizchevroil, which operates in the Tengiz field with reserves estimated at 3.1 billion tonnes, produced 14.4 million tonnes of oil in the first half of 2024, marking a 3.4% decline from the previous year but remaining a key revenue source for Kazakhstan.

The sanctions, initially imposed in January 2025, prohibited operations related to oil production and transportation on Russian territory, including the export and re-export of oilfield services. These restrictions posed a significant threat to CPC’s operations, given that part of the pipeline traverses Russian territory, and to Tengizchevroil, which relies on international contractors. Although the US Treasury’s Office of Foreign Assets Control (OFAC) had temporarily authorized oilfield services for CPC, Tengizchevroil, and the Sakhalin-2 project until June 28, 2025, the new license permanently lifts these restrictions, a development that has been positively received in Astana.