The Future Growth Project at the Tengiz oil field is going to cost its shareholders $48.5 billion, which is a more than $3 billion increase over the previous budget of $45.2 billion, Bloomberg reported, citing undisclosed sources.
The expansion project is implemented by Tengizchevroil, a company controlled by Chevron (50%), Exxon Mobil Corp. (25%) and KazMunayGas.
In a statement on revenues in the third quarter of 2023, Chevron reported that the Tengiz expansion project budget, previously set at $45.2 billion, has been increased by 4% as this work has taken more time than expected. People familiar with the issue told the news agency that the project requires $1.5 billion of additional funds.
On March 14, 2024, Chevron said that its overall forecast for the cost of the Future Growth Project on Tengiz remains intact compared to ranges presented in recent financial statements which suggested increasing spending by 3% to 5%. In July 2021, the oil company also revealed that along with $45.2 billion allocated for the expansion project itself, it had an emergency budget of $1.9 billion to hedge risks related to uncertainty caused by the COVID-19 pandemic.
The expansion project is now expected to launch in the second quarter of 2025. The project was supposed to start in 2022 but was rescheduled twice since then, while its current budget significantly exceeds the original mark of $37 billion.
In September 2023, the company said that it would postpone the start of the project until the end of 2024 due to some obstacles. This situation has been happening against the backdrop of Europe’s growing appetite for Kazakhstani oil following the ban on Russian oil exports in response to its full-scale invasion of Ukraine. Once the expansion project on Tengiz is fully operational, Chevron will be able to produce 260,000 more barrels per day (+40%).
