The company and its partners including Exxon Mobil Corp. will spend $27.1 billion on facilities, $3.5 billion on wells and $6.2 billion for contingency and escalation, Chevron said it a statement on Tuesday. Chevron owns 50 percent, Exxon Mobil has 25 percent and Lukarco, controlled by Russia’s LUKOIL, the remaining 5 percent.
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The agreement is “an inflection point, “Jefferies senior oil analyst Jason Gammel told the Wall Street Journal, pointing out that it is the first investment of more than $10 billion in 2016”.
The expansion was put on hiatus previous year amidst dropping oil prices.
Upon completion, the oil field, generally referred to as TCO, will generate about 1 million barrels of oil per day.
The development is expected to increase crude oil production at the Tengiz oil field in Kazakhstan by about 260,000 barrels per day (bpd).
Kazakhstan holds a 20 percent stake in the venture via state oil and gas firm KazMunayGaz. It will comprise the future expansion project and the wellhead pressure control project, TCO said. “The project builds on a record of strong performance at Tengiz and will add value for Chevron and its stockholders”, Chevron Chairman and Chief Executive Officer John Watson, said.
The Tengiz was discovered in 1979, but at the time Soviet engineers could not find a way to develop it. Chevron won the development rights in 1993. Some experts calculate that it’s introduced Chevron $40 million in earnings, and significantly more than $70 million in income, since 1993, once the US organization turned the very first worldwide gas business to hit on a cope with the previous Soviet republic.
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