Chevron’s $48 Billion Tengiz Oilfield Expansion to Increase Global Oil Supply
Chevron Commences Production at $48 Billion Tengiz Oilfield Expansion in Kazakhstan
Astana – Chevron has recently started production at its $48 billion expansion of the Tengiz oilfield in Kazakhstan. This significant expansion is poised to boost output to nearly 1 million barrels of oil per day, which accounts for about 1% of the global crude supply, as reported by Reuters on Jan. 24.
The Tengiz oilfield is considered one of the deepest and most complex fields globally, primarily due to its high sulphur levels and challenging weather conditions. Despite facing delays and cost overruns since its inception in 2012, the expansion is expected to substantially increase Tengiz’s production capacity.
Clay Neff, Chevron’s head of international exploration and production, mentioned to Reuters that the expansion is projected to reach full capacity of 260,000 barrels per day by June. This will elevate overall production at Tengiz to approximately 1 million barrels of oil equivalent per day.
Chevron holds a 50% stake in the Tengizchevroil joint venture, which it operates. The remaining ownership is divided among Exxon Mobil (25%), Kazakh oil firm KazMunayGas (20%), and Russian oil producer Lukoil (5%).
Neff also stated that Tengizchevroil is anticipated to generate $4 billion of free cash flow in 2025 and $5 billion next year, assuming an average Brent price of $60 a barrel. It is worth noting that the current trading price for benchmark Brent crude oil is around $80 a barrel.
“This project not only allows us to increase production today but also extend the life of the field over time,” Neff remarked to Reuters.
The expansion aligns with Chevron’s strategy to boost production by approximately 3% annually over the next five years, complemented by robust growth in the U.S. Permian shale basin.
