Understanding Chevron’s Evolving Political Risk To Tengiz

Karachaganak Expansion Cost Halved: Envoy

Chevron nets 322,000 barrels of liquids and 529 million cubic feet of natural gas from Tengiz and Karachaganak per day.

Nazarbayev provides strong support for foreign investment and suppresses religious extremism.

Political conditions in Kazakhstan continue to evolve. Nazarbayev proposed divesting some powers to Parliament and Government.

Established power sharing among the elite should fill vacuum as control shifts from Nazarbayev.

Status quo outcome would continue to moderate risk to Chevron’s key Kazakhstan operations.

One can’t overstate the importance of Chevron’s (NYSE: CVX) operations in Kazakhstan to its current production and future growth. Of the company’s 2.6 million net oil-equivalent barrels per day in 2016, 322,000 barrels of liquids and 529 million cubic feet of natural gas came from the Tengiz and Karachaganak fields. In the coming years, Chevron and its partners will invest over $36 billion in Tengiz to expand daily production and lengthen the life of the field. Chevron is also the largest private partner in the Caspian Pipeline Consortium that transports the majority of both fields’ crude oil through Russia to the Black Sea. Additionally, the company operates a valve pant and a polyethylene pipe plant in the region.

Source: 2016 Supplement Annual Report

by John Miller

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