Kazakhstan's Tengiz oil field production 'normal' as expansion work continues despite virus

London — Kazakhstan's largest source of crude oil, the Tengiz field, is producing to plan, and work continues on a major expansion project while steps are being taken to address a coronavirus outbreak among workers, Chevron, the lead partner at the field, said Thursday.

The giant Tengiz field, in operation since 1993, is the biggest contributor to the CPC crude export blend, which loads on Russia's Black Sea coast. The field produced nearly 650,000 b/d last year, amounting to roughly half of CPC loadings.

A current expansion project, estimated at $46.5 billion and due for completion in 2023, is expected to increase oil output from the field to some 900,000 b/d.

Chevron told S&P Global Platts it was "too early to speculate" whether a coronavirus outbreak at the site might delay completion of the expansion project, but the partners were aiming to stick to the existing timetable.

Asked whether there was any impact on the field from Kazakhstan's involvement in international production cuts agreed by OPEC and its partners earlier this month, it said the Tengiz operating company, Tengizchevroil, "is focused on safe and reliable operations and continues to produce according to the business plan approved by the company's shareholders."

Chevron holds a 50% stake in Tengizchevroil alongside ExxonMobil on 25%, state company KazMunaiGaz on 20%, and Russia's Lukoil on 5%.

A number of cases of COVID-19 have been confirmed among the workforce, and the partnership will therefore "temporarily reduce non-essential activities and personnel based in Tengiz in a safe, phased and controlled manner," cooperating with contractors and the authorities, Chevron said.

"Like many other companies in Kazakhstan and around the world, Tengizchevroil continues to work through challenging circumstances and take prudent measures to protect the health and safety of the workforce and to minimize the impact of COVID-19 on our business," it said.

"Currently, Tengizchevroil production operations continue as normal," it added.

Expansion project

Regarding the expansion project, known as the Future Growth Project-Wellhead Pressure Management Project (FGP-WPMP), Chevron said that having taken additional precautions, "we continue to advance the project's key critical-path activities."

Regarding any change to the timeline, Chevron noted the project was already 75% complete. "It is too early to speculate on this, as we are at the very early stages of this process" of adjusting activity, it said.

Tengizchevroil's "top priority is to protect the health and safety of our workforce and the communities where we work... The FGP-WPMP Project continues to achieve important milestones and currently Tengizchevroil is still targeting startup of WPMP in late 2022, with FGP to follow in mid-2023."

Tengiz, together with the Korolev satellite field, has a nameplate capacity of 600,000 b/d, but production has exceeded that in recent years.

Last year Chevron announced a 25% increase in the total cost of the expansion project, along with a delay that pushed completion to mid-2023.

Kazakhstan has been a partner since 2016 in the OPEC+ international agreement aimed at curbing global oil supply, although this is not thought to have impacted output from the country's three largest fields, Tengiz, Kashagan and Karachaganak.