Energy Intelligence does an excellent job discussing Chevron’s recent and, perhaps, counterintuitiveĀ investment decision in Kazakhstan (http://www.energyintel.com/pages/worldopinionarticle.aspx?DocID=930973):
“The US major has profited handsomely from its massive Tengiz oil project in the Caspian country since it was awarded the development contract in 1993. Its 50% stake in the Tengizchevroil (TCO) joint venture accounted for 27% of its oil reserves, 8% of its gas reserves and 13% of its combined oil and gas production in 2015. TCO also contributed $1.9 billion, or 42%, of Chevron’s total earnings last year. Kazakhstan has also benefited immensely from the relationship, receiving more than $115 billion in taxes, royalties and bonuses. That’s why Chevron’s final investment decision to move forward with a $36.8 billion expansion of Tengiz — despite today’s lower oil price and investor demands for capital discipline — cannot be viewed in isolation. The Tengiz expansion is the most expensive oil and gas project to be sanctioned this year and it faces challenging economics. Chevron’s decision to press ahead with the complex project reflects the strategic importance of Tengiz in the company’s global portfolio. It should not be seen as an indicator that Chevron, or the majors in general, are suddenly loosening the purse strings and embarking on a new wave of megaprojects.”
But do read the whole article…
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