Chevron Achieves First Oil at Future Growth Project in Kazakhstan

Rhea-AI Summary

Chevron (NYSE: CVX) has announced the start of oil production at its Future Growth Project (FGP) at the Tengiz oil field in Kazakhstan. The FGP, representing the field's third processing plant, is expected to increase production capacity by 260,000 barrels per day at full capacity, targeting a total output of one million barrels of oil equivalent per day.

This milestone follows the completion of the Wellhead Pressure Management Project (WPMP) in 2024. The combined FGP and WPMP projects have implemented significant infrastructure improvements, including five Frame 9 gas turbine generators, four large compression trains, a new centralized control center, and enhanced sour gas handling capabilities.

The Tengiz field, recognized as the world's deepest producing supergiant oil field, is operated by Tengizchevroil LLP, with ownership split between Chevron (50%), KazMunayGas (20%), ExxonMobil (25%), and Lukoil (5%).

Positive

• Production capacity increase of 260,000 barrels per day at full capacity
• Successful completion of major infrastructure expansion project
• Expected significant increase in free cash flow
• Strategic position in world's largest single-trap producing reservoir

Negative

• None.

Insights

Energy Infrastructure Analyst

The successful launch of the Future Growth Project (FGP) at Kazakhstan's Tengiz field marks a transformative milestone for Chevron's global production capacity. The expansion's target of 260,000 barrels per day additional production represents approximately 13% of Chevron's current global daily oil production, making this one of the most significant capacity additions in recent years.

The project's technological sophistication is particularly noteworthy. The integration of five Frame 9 gas turbine generators and four large compression trains demonstrates advanced engineering capabilities in managing high-pressure, sour gas environments. This infrastructure investment positions Tengiz for sustained long-term production, with the sour gas reinjection system being important for maintaining reservoir pressure and optimizing recovery rates.

From a financial perspective, this expansion significantly strengthens Chevron's free cash flow generation potential. The Tengiz field's low production costs, combined with its massive scale, should provide robust margins even in moderate oil price environments. The 50% ownership stake in TCO ensures Chevron captures a substantial portion of the project's economics, while the partnership structure with KazMunayGas (20%), ExxonMobil (25%) and Lukoil (5%) helps manage capital requirements and political risk.

The strategic importance of this project extends beyond mere production volumes. In the current geopolitical context, having a major producing asset in Kazakhstan enhances Chevron's geographic diversification and strengthens its position in Central Asia's energy landscape. The successful completion of this complex project also demonstrates Chevron's ability to execute major capital projects effectively, which is important for investor confidence in future growth initiatives.

HOUSTON--(BUSINESS WIRE)-- Chevron Corporation (NYSE: CVX) announced today that its 50 percent owned affiliate Tengizchevroil LLP (TCO) has started oil production at its Future Growth Project (FGP) located at the Tengiz oil field in Kazakhstan.

FGP is the third processing plant in operation at the Tengiz oil field, which expands sour gas injection capability and is expected to ramp up output to one million barrels of oil equivalent per day. This milestone follows the completion of the Wellhead Pressure Management Project (WPMP) in 2024, which is designed to optimize the field and processing plants.

The FGP expansion aims to increase crude oil production by 260,000 barrels per day at full capacity.

“First oil at the Future Growth Project is the latest in a series of development milestones, including in the Gulf of Mexico and the Permian, that are expected to significantly increase free cash flow to the company and deliver value for Chevron shareholders,” said Mark Nelson, Chevron vice chairman.

The Tengiz oil field, located in western Kazakhstan, ranks as the world’s deepest producing supergiant oil field and the largest single-trap producing reservoir in existence.

“This milestone concludes a multiyear project that completely revamped the gathering and processing capacity of one of the world’s largest oil fields that will provide significant economic benefit for the Republic of Kazakhstan,” said Clay Neff, president, Chevron International Exploration & Production. “This accomplishment was possible due to our strong partnership with Kazakhstan, our contractors, and the local workforce.”

The FGP and WPMP projects together installed power systems at Tengiz with five Frame 9 gas turbine generators, added four large compression trains with additional pumping capacity, installed a new centralized control center and enhanced sour gas handling and reinjection to the field for long-term pressure maintenance.

Tengizchevroil LLP is a Kazakhstani partnership owned by Chevron, 50 percent; KazMunayGas, 20 percent; ExxonMobil, 25 percent; and Lukoil, 5 percent.

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. More information about Chevron is available www.chevron.com.

As used in this news release, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements relating to Chevron’s operations and strategy that are based on management’s current expectations, estimates, and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions, and variations or negatives of these words, are intended to identify such forward-looking statements, but not all forward-looking statements include such words. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine, the conflict in the Middle East and the global response to these hostilities; changing refining, marketing and chemicals margins; the company’s ability to realize anticipated cost savings and efficiencies associated with enterprise structural cost reduction initiatives; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures related to greenhouse gas emissions and climate change; the potential liability resulting from pending or future litigation; the risk that regulatory approvals and clearances with respect to the Hess Corporation (Hess) transaction are not obtained or are obtained subject to conditions that are not anticipated by the company and Hess; potential delays in consummating the Hess transaction, including as a result of the ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement; risks that such ongoing arbitration is not satisfactorily resolved and the potential transaction fails to be consummated; uncertainties as to whether the potential transaction, if consummated, will achieve its anticipated economic benefits, including as a result of risks associated with third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the potential transaction that are not waived or otherwise satisfactorily resolved; the company’s ability to integrate Hess’ operations in a successful manner and in the expected time period; the possibility that any of the anticipated benefits and projected synergies of the potential transaction will not be realized or will not be realized within the expected time period; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; changes to the company’s capital allocation strategies; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 26 of the company’s 2023 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250123407805/en/

Sally Jones - Joness@chevron.com - London

+44 7827253868

Ainur Sagi – AinurSagi@Chevron.com - Almaty

+77 029992084

Source: Chevron Corporation

FAQ

What is the expected production increase from Chevron's (CVX) Future Growth Project in Kazakhstan?

The Future Growth Project is expected to increase crude oil production by 260,000 barrels per day at full capacity, targeting a total output of one million barrels of oil equivalent per day.

What ownership stake does Chevron (CVX) have in the Tengiz oil field project?

Chevron owns a 50% stake in Tengizchevroil LLP, which operates the Tengiz oil field. Other partners include KazMunayGas (20%), ExxonMobil (25%), and Lukoil (5%).

What infrastructure improvements were made in Chevron's (CVX) FGP-WPMP projects at Tengiz?

The projects installed five Frame 9 gas turbine generators, four large compression trains, a new centralized control center, and enhanced sour gas handling and reinjection capabilities.

When did Chevron (CVX) complete the Wellhead Pressure Management Project at Tengiz?

The Wellhead Pressure Management Project (WPMP) was completed in 2024, preceding the start of oil production at the Future Growth Project.