Plans to expand the largest oil field in Kazakhstan have begun their first steps by introducing new facilities into early operation under the auspices of the American Chevron Corporation, with the expectation that the return of these developments will emerge by the year (2025), and the fruits of full production growth will begin in (2026).
These developments fall under the framework of a project called “Tengiz Chevre Oil”, which is a joint venture between: (Chevron, which manages the project, the Kazakh state Kazamunagas, the American Exxon Mobil, and Luk Arko owned by the Russian company Lukoil), according to the Upstream Online newspaper. (Upstream Online).
In addition to adding new facilities for the largest oil field in Kazakhstan, the expansion plan includes the development of 5 old processing lines, with expectations that they will not be able to resume work at full capacity, in light of the disruption of some field wells, according to what the specialized energy platform has followed.
Expansion of the Tengiz field
Chevron has completed an important step in the expansion plans of the “Tengiz field”, which is known as the largest oil field in Kazakhstan, as it has started the initial operation of a new facility for pumping “sour gas”, while it is planned to continue the development steps by connecting the fuel gas system to the first gas turbine generator.
The expansion plans include the inclusion of new facilities for the “Pressure Management at Well Heads” project, with the aim of raising production levels to their full capacity by reducing pressure in these locations, as well as the inclusion of facilities for the “Future Growth” project, including compressors for pumping sour gas and other wells that pump associated gas into storage tanks. Tengiz field.
The CEO of the American Chevron Company, Roderick Green, described the completion of the first steps of the expansion plan as a milestone, noting that the next stage includes operating additional compressors by the third quarter of this year (2022), in preparation for transferring the technology of operating the largest oil field in Kazakhstan from high pressure. to low.
In addition to strengthening the facilities, as part of the Tengiz field expansion plan, modifications are being made to 5 of the old treatment lines in the field, with expectations that these lines will not be able to operate at full capacity after their development.
development returns
The expansion plans of the “Tengiz Field” project extended for about 6 years, during which it witnessed long events, including the spread of the Corona pandemic and events in the international oil markets.
Chevron relies a lot on this expansion, and the company’s financial director, Pierre Briber, said that the launch of production at full capacity after the completion of the expansion in its various stages will generate huge returns that will be reflected in profits, thus contributing to the ability of the American company to pay the amounts owed by it and used in spending on Joint venture development.
Chevron expects that by 2026, when expansion is expected to be completed and production back to full capacity, free cash flow will increase five times its 2021 levels.
The Tengiz Shaver Oil project is a joint venture to operate the largest oil field in Kazakhstan, the Tengiz field, whose production last year (2022) reached 610,000 barrels per day, equivalent to 40% of Kazakhstan’s total oil production.
The chart below – prepared by the specialized energy platform – shows the volume of Kazakhstan’s oil and condensate production from the year (1985 to 2021), according to data from the British oil company BP:
production forecasts
Chevron expected the production of the largest oil field in Kazakhstan to decrease at slight rates during the second half of this year (2023), as part of the continuation of these changes to transform the work system of the “Tengiz” field from high pressure to low pressure.
In addition, the American company and the field operator pointed out the inability of all wells to resume production, in light of the conversion of the pressure system upon operation, according to what was followed by the specialized energy platform.
Expectations indicate the completion of development work and pressure conversion technologies during the next year (2024), in addition to operating the facilities and facilities of the “Future Growth” project during the first half of the same year. Thus, the returns of the development and expansion of the largest oil field project in Kazakhstan will begin to appear by the year (2025). Achieve full productive growth in the year (2026).
The “Tengiz Shafer Oil” project supplies international markets with crude flows through the “Caspian Sea Pipeline” for export. The line connects the city of Atyrau in Kazakhstan with a terminal near the Russian port of “Novorossiysk”.
Repercussions of the Ukrainian war
Concerns are raised from time to time that the Caspian pipeline and the project to develop the largest joint oil field in Kazakhstan will fall under the scope of the sanctions imposed on Moscow for its invasion of Ukraine nearly a year ago.
In parallel, shipments of Russian oil transported by sea were subjected to a specific price ceiling, which began to be applied on December 5, and the decision is scheduled to be extended to include petroleum products on February 5.
The repercussions of the Ukrainian war were not limited to the fears of the shipments’ path from the “Tengiz” field, but those concerns grew with the American energy company “Chevron”, which operates the field.
Although the past year (2022) was full of tumultuous events about sanctions, shipments, oil prices, etc., Chevron expected the largest oil field in Kazakhstan, the Tengiz field, to continue pumping good profits.
This is consistent with Chevron’s plans, as CFO Pierre Briber said that the company expects profits ranging between 5 and 6 billion dollars during the current year (2023), at rates that exceed last year (2022).
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