Chevron Approves $36.8bn Tengiz Expansion
Tuesday 5 July 2016
Supermajor Chevron has approved the multi-billion-dollar expansion of its Tengiz oilfield in Kazakhstan.
Chevron will proceed with the development of its future growth and wellhead pressure management project (FGP-WPMP) as part of its expansion programme at Tengiz. The new development will increase oil production at the field by about 260,000 barrels per day.
FGP-WPMP is currently estimated to cost $36.8 billion, which includes $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingency and escalation, Chevron said.
Tengiz is operated by Tengizchevroil (TCO) - a 50% Chevron-owned affiliate. Following the expansion, TCO's total production will increase to approximately 1 million barrels of oil equivalent per day.
"The FGP-WPMP represents an excellent opportunity for the company. The project builds on a record of strong performance at Tengiz and will add value for Chevron and its stockholders,” chief executive John Watson said.
"This project builds on the successes of prior expansions at Tengiz and is ready to move forward," executive vice president for upstream Jay Johnson said.
"It has undergone extensive engineering and construction planning reviews and is well-timed to take advantage of lower costs of oil industry goods and services."
WPMP will extend TCO’s production plateau and keep existing plants producing at full capacity, while FGP will use state-of-the-art sour gas injection technology to enhance oil recovery, Chevron said.
First oil is planned for 2022.
TCO is a joint venture partnership also comprising ExxonMobil with 25%, KazMunayGas on 20% and LukArco on 5%.
The partnership also is developing the nearby Korolev field.