Kazakhstan and a group of oil majors led by Chevron approved on Tuesday a $36.8 billion plan to boost production at the Tengiz field, the Central Asian nation's Energy Ministry and foreign partners said in a joint statement.
The super-giant field, one of the world's biggest, accounts for more than a third of total crude output in Kazakhstan which is the biggest ex-Soviet oil producer after Russia.
Under the plan, Tengiz, in which Exxon Mobil and Lukoil also have stakes, will increase output to 39 million tonnes a year (850,000 barrels per day) by 2022 from 27 million tonnes currently.
The Tengiz expansion is the biggest investment project in the industry this year by far and one of just three major oil projects in recent years, two others being Statoil’s Johan Sverdrup and Shell’s Appomatox.
At its peak, Tengiz output will be roughly the same as the current oil production of Britain.
"Today we are witnessing a historic event not just for the oil and gas sector but for the whole country," Kazakh Energy Minister Kanat Bozumbayev told reporters in Astana, sitting next to executives of Tengizchevroil, the joint venture operating Tengiz, and partner companies.
Bozumbayev said the expansion would generate about $120 billion in extra tax payments by 2033 when the Tengiz contract expires.
In a separate statement, Chevron said the total project budget included $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingency and escalation.
Tengizchevroil General Director Ted Etchison told reporters in Astana that the project would be financed by a combination of own funds, contributions from partners and borrowings. He did not provide any details.
Kazakhstan holds a 20 percent stake in the venture via state oil and gas firm KazMunayGaz. Chevron owns 50 percent, Exxon Mobil has 25 percent and Lukarco, controlled by Russia's LUKOIL, the remaining 5 percent.
Oil is Kazakhstan main export and the nation of 18 million has managed to triple is output since gaining independence in 1991, although production has edged down in the last few years due to natural decline at some mature fields.
By: Reuters.
Reporting: Raushan Nurshayeva.
Writing: Olzhas Auyezov.
Editing: Lidia Kelly and William Hardy.
Photo: Forex Guides.
Review: Emerging Market Formulations &
Research Unit, FLAGSHIP RECORDS.
For The #FacebookTeam