Kazakhstan, Tengizchevroil Sign Memorandum on Increasing Production

ASTANA – Minister of Oil and Gas of Kazakhstan Uzakbay Karabalin and acting General Director of Tengizchevroil (TCO) Brad Middleton signed a memorandum of understanding on Nov. 15 on increasing production at the Tengiz field and supplying chemicals to the Atyrau chemical complex.

2013_11_15 подписание тшо_primeministerKarabalin noted the importance of the document for Kazakhstan’s oil and gas industry. The agreement identifies mutual obligations of the parties regarding TCO’s plans to increase production at the Tengiz field, one of the largest oil fields in the world. Production is set to increase from 26 million tons per year to 38 million tons per year. The significant boost in production promises economic benefits for both Kazakhstan and its partner. The project is currently in the conceptual design phase and is expected to be fully approved in early 2014.

The document also contains an agreement to significantly raise the level of local content in production. During construction of the facility, 20,000 jobs will be created. Increasing the use of domestic companies specialising in producing steel structures will be a priority: the parties will hope to reach a volume of 90,000 tons of metal goods.

The two parties also came to an agreement on the provision of necessary chemical supplies at affordable prices to the Atyrau chemical complex now under construction, an agreement Karabalin called no less important. TCO will provide the complex with about 550,000 tons of propane and 380,000 tons of butane a year.

“Today, we are signing an important memorandum of understanding,” said Prime Minister of Kazakhstan Serik Akhmetov, who discussed prospects of cooperation with Middleton at the signing. “I think it creates good opportunities for the further development of the Tengiz field, the oil industry and mechanical engineering in Kazakhstan, and will create new jobs.” Middleton stressed the importance of the memorandum and expressed his readiness to implement it.