A major development led by Chevron Corp. to boost oil output at Kazakhstan’s Tengiz field will cost about $48.5 billion, according to people familiar with the matter.
The US oil giant said at its third-quarter earnings in October that the budget for Tengiz, previously set at $45.2 billion, was rising by about 4% due to a slower-than-expected startup. There will be a further $1.5 billion of spending on the project, the people said, asking not to be named because the information isn’t public.
Chevron said in a statement on Thursday that its guidance for the total project cost of the Tengiz expansion “remains unchanged from the ranges we provided in our most recent earnings calls,” which was for an increase of 3% to 5%.
In addition to the project’s target cost of $45.2 billion, the company said in July 2021 that there was a contingency of $1.9 billion to recognize schedule uncertainty caused by the Covid-19 pandemic.
The expansion of the Tengizchevroil venture, known as the Future Growth Project, has delayed its full startup into the second quarter of next year. The project has gone well beyond its initial budget of $37 billion and the completion date had already been rescheduled twice from the original plan of mid-2022.
Kazakhstan’s Energy Ministry didn’t immediately respond to a request for comment.
Tengizchevroil is 50% owned by Chevron, while Exxon Mobil Corp. and state-owned KazMunayGas have a 25% and 20% stake in the venture, respectively.
