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Memorandum On TCO Future Growth Project Signed

November 21 2013, 14:59

By Saule Tasboulatova

The Republic of Kazakhstan and Tengizchevroil LLP (TCO) signed a Memorandum of Understanding (MOU) that sets out mutual commitments to progress TCO’s plans to increase production at Tengiz field.

The Republic of Kazakhstan and Tengizchevroil LLP (TCO) signed a Memorandum of Understanding (MOU) that sets out mutual commitments to progress TCO's plans to increase production at Tengiz field, a joint message of Kazakhstan's Oil and Gas Ministry and Tengizchevroil said.

The project envisages the increase of oil production in Tengiz field from 26 million tons to 38 million tons of oil per year. According to the message, the MOU signing is an important milestone on the path to a Final Investment Decision for the projects by TCO partners.

"The MOU aligns the Government of Kazakhstan and TCO on the pursuit of common goals in the development of TCO's Future Growth and Wellhead Pressure Management Projects (FGP and WPMP); and outlines tasks to be executed by the signatories in order to execute FGP and WPMP," Kazakhstan's Minister of Oil and Gas Uzakbai Karabalin said.

FGP will utilize sour gas injection technology used in existing operations to expand production capacity by approximately 12 million tonnes per year.

Through installation of a central pressure boost facility, WPMP will maintain the volumes and pressure of crude oil delivered to the existing Tengiz crude oil processing plants. The projects are currently completing the front end engineering and design (FEED) phase.

Speaking about the prospects of FGP for Kazakhstan  the RoK Oil Minister Uzakbai Karabalin after the signing of MOU said, that “in the construction phase there will be created additional 20 thousand new workplaces. Great attention is paid to the increase of orders for domestic companies that produce structural steel”.

We approached TCO press service with the question about Local Content issue outlined in MOU, if such issue is available. However, we have not received any answers. We can assume that TCO, as well as other foreign companies show little concern about local content issue. In any way, they try to avoid this unpleasant issue. Most likely, that local content, as always, will be reduced down to opening of new workplaces only.

Tengizchevroil partners include Chevron, 50 percent; KazMunaiGas, 20 percent; ExxonMobil Kazakhstan Ventures Inc., 25 percent; and LUKArco, 5 percent.

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