Feb 7, 2025
Chevron speeds up the development of the Kazakh oilfield.
Chevron is accelerating its development of the Tengiz oilfield in Kazakhstan, according to two sources familiar with the plans, which will increase its output to roughly 1% of global crude supply.
In January, Chevron announced the commencement of a $48 billion expansion of Tengiz, recognized as one of the world's most complex and deepest oilfields due to its high sulfur content and severe weather conditions.
Since the expansion began in 2012, the Kazakh oilfield has faced significant delays and substantial cost overruns.
Clay Neff, who heads Chevron's international exploration and production, shared with Reuters last month that the Tengiz expansion is anticipated to achieve full capacity of 260,000 barrels per day (bpd) by June, thereby increasing the total production to about 1 million barrels of oil equivalent daily.
A source privy to the plans indicated on Friday that Chevron is likely to finalize the expansion ramp-up by the end of February, four months ahead of schedule.
Kazakhstan has consistently surpassed its output quota of 1.468 million bpd as part of the production-limiting agreement made with the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively referred to as OPEC+.
The rapid expansion of the oilfield may complicate efforts to control Kazakhstan's overall oil output in accordance with the quotas set by the OPEC+ coalition of major producers.
This year, Kazakhstan aims to enhance its oil and gas condensate production to 96.2 million metric tons (approximately 2 million bpd), rising from 87.56 million tons in 2024.
On Tuesday, Kazakhstan's energy ministry stated that the country will take all necessary measures this and next year to meet its obligations under the OPEC+ agreement and to offset overproduction in 2024.
Oil extracted from the field is transported via the Caspian Pipeline Consortium (CPC) for export from a terminal located near Novorossiisk, a port on Russia's Black Sea.
According to another source familiar with the data, oil production at Tengiz has already climbed to 900,000 bpd, up from an average of 606,000 bpd in 2024.
"It appears to be ahead of schedule," commented a trader.
Chevron holds a 50% interest in the Tengizchevroil joint venture, which it operates, while Exxon Mobil owns 25%, Kazakh oil company KazMunayGas has 20%, and Russia's Lukoil possesses 5%.
Tengizchevroil, which has not yet responded to a request for comment, is projected to generate $4 billion in free cash flow in 2025 and $5 billion the following year, assuming an average Brent price of $60 per barrel.
Currently, oil is trading at approximately $75 per barrel.
In January, Chevron announced the commencement of a $48 billion expansion of Tengiz, recognized as one of the world's most complex and deepest oilfields due to its high sulfur content and severe weather conditions.
Since the expansion began in 2012, the Kazakh oilfield has faced significant delays and substantial cost overruns.
Clay Neff, who heads Chevron's international exploration and production, shared with Reuters last month that the Tengiz expansion is anticipated to achieve full capacity of 260,000 barrels per day (bpd) by June, thereby increasing the total production to about 1 million barrels of oil equivalent daily.
A source privy to the plans indicated on Friday that Chevron is likely to finalize the expansion ramp-up by the end of February, four months ahead of schedule.
Kazakhstan has consistently surpassed its output quota of 1.468 million bpd as part of the production-limiting agreement made with the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively referred to as OPEC+.
The rapid expansion of the oilfield may complicate efforts to control Kazakhstan's overall oil output in accordance with the quotas set by the OPEC+ coalition of major producers.
This year, Kazakhstan aims to enhance its oil and gas condensate production to 96.2 million metric tons (approximately 2 million bpd), rising from 87.56 million tons in 2024.
On Tuesday, Kazakhstan's energy ministry stated that the country will take all necessary measures this and next year to meet its obligations under the OPEC+ agreement and to offset overproduction in 2024.
Oil extracted from the field is transported via the Caspian Pipeline Consortium (CPC) for export from a terminal located near Novorossiisk, a port on Russia's Black Sea.
According to another source familiar with the data, oil production at Tengiz has already climbed to 900,000 bpd, up from an average of 606,000 bpd in 2024.
"It appears to be ahead of schedule," commented a trader.
Chevron holds a 50% interest in the Tengizchevroil joint venture, which it operates, while Exxon Mobil owns 25%, Kazakh oil company KazMunayGas has 20%, and Russia's Lukoil possesses 5%.
Tengizchevroil, which has not yet responded to a request for comment, is projected to generate $4 billion in free cash flow in 2025 and $5 billion the following year, assuming an average Brent price of $60 per barrel.
Currently, oil is trading at approximately $75 per barrel.