Tengizchevroil Lowers Oil Production and Raises Sales of Liquefied Gas

Tengizchevroil has published its operating results for the first half of 2020.

In the first half of this year, volume of oil production at the Tengiz oil field amounted to 14.26 million tons, or 112.51 million barrels, which is 4.6% less than in the same period last year. At the same time, the company increased sales of liquefied gas by 7.8%, to 725 thousand tons. Sales of dry gas over the same period decreased by 2.5%, to 3.9 billion cubic meters, and sales of sulfur remained at the same level, 1.3 million tons.

From January to June, direct payouts from Tengizchevroil to the budget of Kazakhstan amounted to $3.9 billion which is 30% lower than a year earlier. In the first half-year, the company also bought goods and services from Kazakhstani suppliers for $2 billion, including $1.4 billion that were spent on future growth projects and wellhead pressure management projects (FGP/WPMP). In the first half of last year, Tengizchevroil’s spending on buying goods and services from Kazakhstani suppliers exceeded $2.1 billion, including over $1.6 billion for FGP/WPMP.

It bears reminding that, in 2016, participants of Tengizchevroil announced the approval of the final decision on financing FGP/WPMP, which is the next step in expanding production capacity of the Tengiz oil field and is supposed to increase annual oil production by 12 million tons, from 27 to 39 tons.

The expansion project has been completed by 78% to date. The company claimed that, like many other companies in Kazakhstan and around the entire world, it has to operate in a difficult environment and make viable decisions in order to protect health and ensure its staff’s safety, as well as minimize the impact of the COVID-19 pandemic on business performance. As of the end of the first half of 2020, work on manufacturing modules in South Korea has finished, and all modules have been sent to Kazakhstan by sea. Some of them have already been delivered to Tengiz, while others are on their way.

As Kursiv.kz reported earlier, in April, cases of COVID-19 were discovered in the oil field, and the company decided to evacuate some of the staff working on FGP/WMPMP. Implementation of the projects themselves was reduced to only conducting critically important work.

Earlier it became known that to finance the implementation of FGP, on July 15, Tengizchevroil placed two issues of Eurobonds for $1.25 billion total, with the maturity date in August 2025 and 2030.

Tengizchevroil is developing the Tengiz oil field and Korolev oil field since 1993, which have a total volume of accessible resources at 890 million to 1.37 billion tons of oil (7.1–10.9 billion).

Participants of the company are Chevron – 50%, ExxonMobil – 25%, KazMunayGas – 20%, and Lukarco joint company – 5%.