press release

Chevron Press Release - Tengizchevroil Announces Tengiz Field Expansion Project; $250 Million Contract

ISTANBUL, July 16, 1997 -- Tengizchevroil today announced the awarding of a $250 million (U.S.) contract to a Bechtel-Enka joint venture to increase production capacity at the super giant Tengiz Field in Kazakhstan by about 30 percent.

The project represents the third major expansion of the Tengiz Field since Chevron and Kazakhstan formed the Tengizchevroil joint venture in 1993.

Tengiz currently produces about 160,000 barrels of oil per day (7.3 million tons per year). Under an existing contract, the Bechtel-Enka venture is now expanding capacity to about 187,000 bpd (8.5 mt/year). The total value of their work in 1997 is expected to exceed $100 million (U.S.). The Bechtel-Enka joint venture has been the prime contractor for Tengizchevroil since 1993.

The new Tengizchevroil contract with Bechtel-Enka, announced here today in Enka's headquarters city, will increase production capacity to about 240,000 bpd (11 mt/year) by year-end 1999 with the construction of a new oil and gas processing plant.

"This contract marks another milestone in the continuing expansion of Tengiz," said Nick Zana, general director of Tengizchevroil. "We expect to invest more than a billion dollars over the next three years, and we are very much on schedule toward our long-term goal of reaching 700,000 bpd peak production by the year 2010."

The Tengiz processing complex separates crude oil from natural gas and removes hydrogen sulfide, which is converted to sulfur. Oil is shipped to global markets via pipeline, barge and rail car. The first two processing plants were in place when Tengizchevroil began operation, and two more were added in late 1994.

Bechtel-Enka will build the fifth processing plant - called Train 5 - which includes an oil and gas separation unit, an acid gas removal unit, a gas sweetening unit, as well as a power generation and distribution system. The joint venture will provide engineering, procurement, and construction services, with total cost estimated at $250 million.

"This contract is a good example of cooperation among American, Turkish, and Kazakhstani contractors," Zana added. "As part of the contract, Bechtel-Enka will employ local contractors and develop local manpower resources."

Tengizchevroil is owned 45 percent by Chevron, 25 percent by Kazakhstan state company Kazakh Oil, 25 percent by Mobil and 5 percent by LUKarco.

Updated: July 1997