Chevron approves $37-bn Kazakh oil proj expansion

London, July 5: Chevron will go ahead with the $36.8 billion expansion of the Tengiz oil project in Kazakhstan, one of the biggest new investments since crude’s slump two years ago.

The company and its partners including Exxon Mobil will spend $27.1 billion on facilities, $3.5 billion on wells and $6.2 billion for contingency and escalation, Chevron said in a statement on Tuesday. First oil from the expanded project is planned for 2022. The Tengiz expansion comes after oil explorers around the globe slashed more than $1 trillion in investments to weather a downturn that saw oil prices tumble 75% from June 2014 to a 12-year low in January. The slump has reduced prices of some services and rigs required for drilling and Chevron said it’s taking advantage of that.

Tengiz “has undergone extensive engineering and construction planning reviews andiswell-timedtotakeadvantage of lower costs of oil industry goods and services,” Jay Johnson, executive vice president for upstream at Chevron, said in the statement.

The expansion will increase crude production in the field by 260,000 barrels a day, or about 13 million tonnes a year. The project’s total hydrocarbon output will rise to about 1 million barrels of oil equivalent per day, according to the statement. The expansion will result in the production of an additional 250 million tonnes of oil by 2033. Bloomberg