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The energy giant is spending just about 50 billion dollars to expand the Tengiz oil site, which will allow it to pump a million barrels per day.
By Stanley Reed
Chevron announced on Friday that the expansion of its have its have its tense box in Kazakh, with the aim of expanding its production this year to about one million barrels consistent with the day, or almost 1% of global supplies.
Chevron, which recently moved its headquarters from near San Francisco to Houston, continues to pour money into oil production, raising concerns that demand will weaken as consumers shift to electric cars and cleaner energy.
“We know that the global demand for oil is going to continue to grow,” Clay Neff, president of Chevron international exploration and production, said in an interview.
Tengiz, one of the most prolific oil deposits in the world, has been generating oil for about 30 years. Even so, the teams that work on the plains covered with weeds where the wild horses roam are prepared to increase production by approximately 40 percent. The first additional barrels are now arriving, said Chevron in a press release.
“It’s quite an oil box and one that will produce for decades to come,” Mr. Neff.
This increased production will lift oil into a global market that some analysts say will struggle to accommodate increased production this year, which could weigh on prices, which are now around $79 per barrel for Brent, according to the international index. reference. Kazakhstan is a member of the OPEC oil cartel, further controlled through Saudi Arabia, which has put pressure on Kazakhstan for its production.
At the same time, President Trump is exhorting operators in the United States as well as OPEC to pump more oil to bring down prices.
Tengiz is crucial for Chevron’s financial performance. Mr. Neff forecast that, assuming oil prices of $60 a barrel, it will generate Chevron $4 billion in 2025 and $5 billion in 2026 in free cash flow.
The oil box is consistent through a 50 joint venture consistent with Cent owned through Chevron. exxonMobil, the American power giant; Lukoil, a Russian company; And the kazmunaygas of Kazakhstan Kazmunaygas are also partners of the corporation, known as Tengizchevroil.
The company is also important for Kazakhstan: It generated 58% of government tax profits paid through oil corporations in 2023, according to a report by Kazenergy, an industry group.
Tengiz exploitation is delicate because hydrogen sulfide, a lethal gas will have to be eliminated from oil. However, the massive production of the box helps to maintain low prices.
The bill for this expansion may succeed by $49 billion, Chevron estimates. Construction, which included a new port on the Caspian Sea, has been going on for about a decade. At its peak, about 90,000 other people were involved.
During the expansion, Chevron has navigated hazards including the blowback from Russia’s war in Ukraine, disruption from the coronavirus pandemic and unrest in Kazakhstan in 2022 that led to neighboring Russia sending in troops.
Managing relations with Russia remains essential for the project. Equipment for the expansion was shipped through Russia and most of oil is sent by pipeline to the Russian port of Novorossiysk on the Black Sea for export, giving Moscow a potential chokehold.
Stanley Reed reports on energy, the Middle East from London. He has been a journalist for more than 4 decades. Learn more about Stanley Reed
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