Chevron Press Release - Tengizchevroil Celebrates Two-year Anniversary
SAN FRANCISCO, April 6, 1995 -- The Republic of Kazakhstan and Chevron Corporation today celebrated the second anniversary of Tengizchevroil (TCO), their joint venture to produce and sell oil from the giant Tengiz oil field.
The project, the largest and one of the best known joint ventures in the former Soviet Union, is designed to produce and export for hard currency some 6- to 9-billion barrels of oil from the Tengiz field.
The first stage of the $20-billion, 40-year project is completed, and now has a processing capacity of 85,000 barrels per day (4 million tons per year), and the ability on short notice to expand to 130,000 bpd (6 million tons per year).
The anniversary was observed in a ceremony at the Tengiz field on the northeastern Caspian Sea coast, attended by Kazakh leaders, including the Republic of Kazakhstan's Oil Minister, Nurlan Balgimbaev, and Chevron Vice Chairman Dennis Bonney.
"The project is vital to the economic progress of Kazakhstan," said Balgimbaev. "Our success here will bring hard currency into the country and demonstrate to the world that Kazakhstan is a nation where investment is safe and partnership is encouraged."
Bonney added: "We are honored to be working with the Republic of Kazakhstan, we are proud of the progress our joint-venture has achieved, and we are looking forward to many productive years to come."
To mark the anniversary, Tengizchevroil today formally began operation of its newly constructed, $102 million demercaptanization plant to remove sulfur compounds from Tengiz crude oil prior to pipeline shipment.
"Completion of this plant means that TCO is providing low mercaptan crude oil, which is required for shipment through the Russian pipeline system," said Morley J. Dupr, TCO general director. "We anticipate that with this accomplishment, TCO exports will soon increase."
Dupr outlined other highlights of the joint venture's significant accomplishments during its first two years:
Capital projects Completed construction of a new crude oil processing plant that has increased processing capacity to more than 85,000 bpd ( 4 million tons per year).
Environment Completed environmental baseline, air quality and groundwater quality studies; established a sanitary landfill and a recovery center for recycling; reduced water discharge by improving water effluent plant operations.
Safety Trained all supervisors and emergency response groups; implemented a wellhead preventive maintenance program on 59 wells; purchased new fire fighting trucks and emergency response vehicles.
Employees Upgraded medical care and general standard of living; provided technical, operational, and safety training to more than 2,500 employees; implemented educational assistance and scholarship programs.
Community Donated time, medical equipment and pharmaceutical supplies to local clinics, and laboratory equipment and building supplies to local schools and institutes; provided police agencies with vehicles; assisted in local road and bridge repairs.
Local business development Utilized local companies and institutes to perform technical laboratory analysis and research; provided skills training to employees of local companies; utilized 49 local businesses in 1994, up from 33 in 1993.
Technology Installed central computer capability for financial and operational software and 800 personal computers on a fiber-optic computer network linking TCO with worldwide networks; brought in state-of-the-art technology for upgrading oil field operations.
Exports Reduced light mercaptans in crude oil from 350 to less than 5 parts per million; established a joint task force with Kazakhstan to study transportation alternatives; sold all crude oil that TCO was permitted to export; established pipeline contracts with 10 pipeline/terminal companies.
In addition, projects were completed in the Atyrau Oblast (regional area). This five-year, $50 million social program managed by TCO with the involvement of Oblast administration officials has spent more than $21 million to date on upgrading medical, heating and potable water and housing facilities. Work is progressing on further upgrades to water treatment and distribution systems and medical facilities and services.
"We are proud of what we've been able to achieve in our first two years in Tengiz," Dupr said. "TCO will be able to accomplish much more once the export issues are resolved."
Although the joint venture still wrestles with the lack of an adequate export pipeline, the company and its owners remain confident that the problem will be resolved. "We believe in TCO's long-term viability," said Chevron's Bonney. "Chevron is committed to working with our Kazakh partners to make Tengiz a world-class example of a successful, long-term economic partnership."
Updated: April 1995