ASTANA — Chevron has started production at its $48 billion expansion of the Tengiz oilfield in Kazakhstan. The expansion is expected to increase output to nealry 1 million barrels of oil per day, or approximately 1% of the global crude supply, reported Reuters on Jan. 24.
Chevron has a 50% stake in the Tengizchevroil joint venture which it operates, with Exxon Mobil holding 25%, Kazakh oil firm KazMunayGas 20% and Russian oil producer Lukoil the remaining 5%. Photo credit: Chevron.
Due to high sulphur levels and harsh weather conditions, Tengiz is one of the world’s deepest and most complex fields. The expansion will significantly boost Tengiz’s production capacity, though it has faced delays and cost overruns since its inception in 2012.
Chevron’s head of international exploration and production Clay Neff told Reuters that the expansion is expected to reach full capacity of 260,000 barrels per day by June, lifting overall production at Tengiz to around 1 million barrels of oil equivalent per day.
Chevron owns a 50% stake in the Tengizchevroil joint venture, which it operates. Exxon Mobil holds 25%, Kazakh oil firm KazMunayGas 20% and Russian oil producer Lukoil the remaining 5%.
Neff said that Tengizchevroil is expected to generate $4 billion of free cash flow in 2025 and $5 billion next year at an average Brent price of $60 a barrel. Benchmark Brent crude oil is currently trading at around $80 a barrel.
“What this project allows us to do is not only increase production today but also extend the life of the field over time,” Neff told Reuters.
The expansion is part of Chevron’s plans to increase its production by around 3% per year over the next five years, along with strong growth in the U.S. Permian shale basin.
