Kazakhstan ready to extend Tengiz agreement, but on new terms

Kazakhstan is prepared to extend the agreement governing the development of the Tengiz oil field beyond 2033, but on new terms. The government has already presented investors with stringent financial and operational conditions.

The Kazakhstani government aims to secure a one-time payment of $10 billion and increase the state’s stake in the project from 20% to 35%, Bloomberg reported, citing sources.

Negotiations over a potential extension of the existing contract with the project operator, Tengizchevroil (TCO), are currently in their early stages. U.S. oil major Chevron is TCO’s largest shareholder, with a 50% stake. ExxonMobil holds 25%, Kazakhstan’s national oil company KazMunayGas holds 20% and Russia’s Lukoil holds 5%.

The negotiations are taking place against a backdrop of heightened environmental scrutiny of TCO. In July, authorities in the Atyrau region reported another case of unauthorized waste accumulation at the Tengiz field.

The company, in turn, initiated a pre-trial appeal process, asserting that it operates in strict compliance with its permits. In April, the company was fined 53.7 million tenge ($122,180) for emissions exceeding permitted limits.