A joint venture between California-based Chevron Corp. (NYSE: CVX), which has a major presence in downtown Houston, and other companies will move forward with a $36.8 billion project to boost crude production at the Tengiz oil field in Kazakhstan.
According to the Wall Street Journal, the project is one of the biggest such investments since oil prices began to fall two years ago.
Chevron owns 50 percent of the affiliate, Tengizchevroil, while Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) owns 25 percent, Kazakhstan’s state-owned oil and gas company KazMunayGas has 20 percent, and Russia-based Lukoil subsidiary LukArco owns 5 percent.
The Future Growth and Wellhead Pressure Management Project will increase crude oil production by about 260,000 barrels per day, bringing Tengizchevroil’s total production to about 1 million barrels of oil equivalent per day. First oil is expected in 2022.
Cost estimates include $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingency and escalation.
Jay Johnson, executive vice president of upstream for Chevron, said in a statement that the project “is well-timed to take advantage of lower costs of oil industry goods and services.”
As oil prices hover around $50 but costs that were cut during the slump remain low, oil producers are returning to projects that had been halted, the WSJ reports. Data from Houston-based Tudor Pickering Holt & Co. shows eight expensive energy developments have been approved so far this year, up from four for all of 2015, the WSJ reports.
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