highlights of operations
Chevron is Kazakhstan’s largest private oil producer, holding important stakes in two of the nation’s biggest oil-producing fields – Tengiz and Karachaganak.
The Tengiz Field is the world’s deepest operating super-giant oil field, with the top of the reservoir at about 12,000 feet (3,657 m) below ground. Chevron holds a 50 percent interest in Tengizchevroil (TCO), which operates the field. The joint venture is also developing the nearby Korolev Field.
In addition, Chevron holds an 18 percent interest in the Karachaganak Field, one of Kazakhstan’s largest petroleum producing reserves.
Chevron is the largest private shareholder in the Caspian Pipeline Consortium (CPC). The Caspian Pipeline provides an important export route for crude oil from Tengiz and Karachaganak. The pipeline is undergoing a major expansion.
Chevron also operates a polyethylene pipe plant and a valve plant in Atyrau. The valve plant is run entirely by Kazakhstanis.
In Kazakhstan, as in any country where Chevron does business, we are a strong supporter of programs that help the community.
exploration and production
Through our subsidiaries, Chevron is involved in two of Kazakhstan’s largest joint ventures: Tengizchevroil (TCO) and Karachaganak Petroleum Operating B.V. (KPO). Net daily production in 2016 from the Tengiz Field and the Karachaganak Field averaged 322,000 barrels of liquids and 529 million cubic feet of natural gas.
Tengizchevroil looks ahead
TCO is developing the Tengiz and Korolev crude oil fields in western Kazakhstan. Net daily production in 2016 averaged 263,000 barrels of crude oil, 375 million cubic feet of natural gas and 22,000 barrels of natural gas liquids. The majority of TCO’s crude oil production was exported through the Caspian Pipeline.
In 2016, work continued on two projects.
- The Future Growth Project and Wellhead Pressure Management Project (FGP-WPMP), managed as a single integrated project, is designed to increase the Tengiz Field’s production capacity and apply proven sour gas technology to existing operations to increase recovery from the reservoir.
- The Capacity and Reliability Project is designed to reduce bottlenecks and increase plant efficiency and reliability at TCO facilities.
Expanding the promise of Tengiz
The final investment decision for the FGP-WPMP – the next expansion of the Tengiz oil field – was made in July 2016 with first oil planned for 2022.
The FGP is designed to utilize the sour gas injection technology that was successfully developed and proven during TCO’s previous expansion in 2008. Tengiz crude oil production capacity is expected to increase by about 260,000 barrels per day, with the field’s total production rising to approximately 1 million barrels of oil-equivalent per day.
Site infrastructure and facilities construction is underway at Tengiz. A new cargo offloading facility for receiving modules and pipe racks is under construction at Prorva, Kazakhstan. In October 2016, the first steel was cut, marking the beginning of the Kazakhstani-fabricated component for the FGP-WPMP.
Karachaganak, one of the world’s largest fields
The Karachaganak Field in northwest Kazakhstan is among the world’s largest oil and gas condensate reserves. Development of the field is being done in phases.
In 2016, net daily production at Karachaganak averaged 37,000 barrels of liquids and 154 million cubic feet of natural gas.
Approximately 34,000 net barrels per day of processed liquids were exported and sold at prices available in world markets. Most of the exported volumes were transported through the Caspian Pipeline. A portion was also exported via the Atyrau-Samara (Russia) pipeline. Liquids not exported via these pipelines were sold as condensate in local and Russian markets.
Moving product to market via the Caspian Pipeline
Chevron has a 15 percent interest in the 935-mile (1,505-km) CPC crude oil export pipeline that runs from the Tengiz Field in Kazakhstan to the Black Sea port of Novorossiysk, Russia. The pipeline provides a key export route for crude oil produced from the Tengiz and Karachaganak fields. In 2016, an average of 959,000 barrels of crude oil per day passed through the pipeline, composed of 883,000 barrels from Kazakhstan and 76,000 barrels from Russia.
Work continues on the pipeline capacity expansion project. The project is being implemented in phases, with capacity increasing progressively until reaching a design capacity of 1.4 million barrels per day in mid-2017. By the end of 2016, capacity from Kazakhstan had increased to 1.0 million barrels per day. The expansion is expected to accommodate a portion of the future growth in TCO production.
Building on success and diversifying the economy
Chevron is helping Kazakhstan meet its goal to diversify the economy. Since 2003, the company has owned and operated a polyethylene pipe plant in Atyrau. The plant’s eight processing lines have a production capacity of 17,000 tons of polyethylene pipe per year. The plant also produces metal-plastic and thermoplastic pipes used in heating and hot water supply systems. In 2013, Chevron opened another plant in Atyrau that produces up to 30,000 iron gate valves per year. The valves are used in cold water supply, sewage systems and natural gas distribution networks. Both plants are managed and operated by Kazakhstani employees.
The plants bring new technology to Kazakhstan and supply the country with products that are currently imported. In addition, there is potential for export.
marketing and retail
Chevron markets lubricants, coolants and fuel treatments under the Texaco® brand for consumer, commercial and industrial use in Kazakhstan through our authorized distributor.
in the community
In Kazakhstan, Chevron works in partnership with local and national governments, communities, nongovernmental organizations , and other institutions on projects focused on health, education and economic development.
Chevron is committed to promoting healthy lifestyles, with a special focus on young people and women.
Chevron promotes HIV/AIDS awareness among youth in Almaty. In 2016, Chevron organized a summer camp for teenagers and a series of public events that focused on healthy lifestyles. Chevron donates medical equipment to hospitals and maternity centers in Almaty and Astana and supports professional development of health workers. In 2016, we supported the training of approximately 200 doctors and nurses from children’s intensive therapy departments of Almaty hospitals. The instruction was aimed at reducing illness and mortality among newborns.
Chevron supports educational development programs in Kazakhstan that reach thousands of youths, teachers and trainers from urban and rural schools. In partnership with local government, community and educational institutions, Chevron is implementing the Atyrau Youth Development Initiative, a social investment program designed to prepare young people for success in the workplace and the community. More than 150 teachers and 2,000 young people have benefited from the interactive training in life skills and applied science, technology, engineering and math (STEM) subjects.
In 2016, in cooperation with the International IT University, Chevron supported Kazakhstan’s Robocon Games for schoolchildren. Inspired by the theme “Bioenergy for the World,” students and their teachers built robots that could deliver biofuels to a bioreactor.
Chevron’s University Partnerships and Association Relations program works with Kazakh National Technical University to provide grants and scholarships to young people seeking advanced professional and technical training. In 2016, Chevron provided scholarships to more than 60 high-achieving undergraduate and graduate students.
Chevron is also partnering with the U.S. Mission to Kazakhstan to develop and maintain an initiative in Almaty called MakerSpace. These community-operated spaces enable people interested in computers, machining, technology, science, digital art and creative arts to meet, socialize and collaborate on projects that benefit the community.
Chevron continues to maintain strong ties with the Union of Artisans and has helped thousands of artisans across Kazakhstan with design and business skills training. Product quality has improved, access to new markets has expanded and a professional network has been created.
Chevron partners with British Council Kazakhstan to help young people – aged 17 through 19 – to learn skills for employment and entrepreneurship. Nearly 400 young people have received training in project management, business planning, budget development and information technology. Participants have formed teams to develop and implement social entrepreneurship projects in Almaty.
In 2016, Chevron launched the Social Impact Hub in Almaty, an initiative that brings together individuals with a common vision, that of learning to work toward effective and sustainable solutions to social challenges.
tengizchevroil and karachaganak: investing in the future
Chevron contributes to the development of communities through its business partnerships in the Tengiz and Karachaganak projects. From 1993 through 2016, TCO invested more than $1.3 billion to fund social projects and programs for the community and employees in Atyrau oblast. TCO has provided resources for social infrastructure projects, schools, hospitals and clinics and for the construction of water and electric systems.
In health care, TCO partners with the Kazakhstan Association of Family Physicians (KAFP) to reduce cardiovascular disease through prevention programs. In 2016, the KAFP provided clinical training to health care workers and helped conduct blood pressure, cholesterol and other testing for nearly 4,700 people.
In education, TCO has programs that focus on STEM subjects, promote English language development and support computer literacy. TCO employees who volunteer their time to these programs benefit by developing skills in teamwork building, communication and public speaking. Volunteers also appreciate the opportunity to expand their understanding of other cultures.
We also work with our Karachaganak partners to support the community. Since 1998, KPO has contributed $340 million to social infrastructure projects in western Kazakhstan.
In 2016 in Uralsk, KPO completed construction of the Palace for Youth and Schoolchildren, a modern facility for educational and recreational events and programs. KPO also completed a kindergarten for 1,400 children in Burlin village in West Kazakhstan and has improved nearby roads.
KPO provides medical treatment and recreation for pensioners living in the villages around Karachaganak. In addition, the company offers scholarship programs and promotes English language development.
record of achievement
For more than two decades, Chevron has worked to develop Kazakhstan’s energy potential and advance its economy. Our investment has been marked by key milestones.
- 1993 – Chevron signed the foundation agreement with the Republic of Kazakhstan that created the joint-venture company Tengizchevroil.
- 1996 – A Chevron-branded gas station opened in Almaty, the first international station in the country.
- 1997 – Chevron entered the Karachaganak Petroleum Operating Consortium to develop Karachaganak, one of the world largest oil and gas fields.
- 2001 – The Caspian Pipeline Consortium’s crude oil export pipeline began operations from Tengiz to the Black Sea port of Novorossiysk in Russia.
- 2003 – Chevron started production at the polyethylene pipe plant in Atyrau.
- 2006 – The Tengiz Field produced its 1 billionth barrel of oil.
- 2008 – TCO completed the Sour Gas Injection Project and the Second Generation Plant expansion, nearly doubling daily production of oil and natural gas.
- 2011 – Chevron began producing metal-plastic pipes at its polyethylene pipe plant in Atyrau.
- 2011 – The CPC broke ground on the Caspian Pipeline capacity expansion project.
- 2012 – TCO founded the Kazakhstan Maritime Academy to support offshore oil and gas developments and generate employment opportunities for graduating marine officers. Established under the auspices of the Kazakh-British Technical University, the academy is partnered with the Netherlands-based international maritime educational conglomerate STC-Group.
- 2012 – TCO produced the 2 billionth barrel of crude oil recovered from the Tengiz and Korolev fields.
- 2013 – Chevron began production of iron gate valves, which are used in water supply, sewage and natural gas transportation systems. The technology used at the newly constructed Atyrau Valve Plant is unique in Kazakhstan and other former Soviet countries.
health, environment and safety
Protecting people and the environment is one of Chevron’s core values.
Tengizchevroil continues to record high marks in standardized industrial safety measurements, such as days away from work. In 2016, TCO employees and contractors worked 55 million man-hours without a single Days Away From Work incident. TCO strives for zero workplace injuries and is continuously working to improve its safety record.
Employees at the polyethylene pipe plant and the valve plant in Atyrau have worked without a Days Away From Work injury since its earliest days of operation. Plant employees continue to achieve excellent results. The plant has surpassed 2 million work-hours – more than 14 years – of incident-free operation.
Chevron also invests heavily in protecting the environment. Since 2000, Tengizchevroil has spent more than $3 billion on measures that have reduced natural gas flaring from its operations by 84 percent. TCO has applied innovative technologies to redirect gas for its own use, for export to consumers and for reinjection into the reservoir.
Chevron contributes to Kazakhstan’s economy through employee wages, purchases of goods and services from local suppliers, tariffs and fees paid to state-owned companies, and taxes and royalties paid to the government. Since Tengizchevroil’s founding, the company has paid about $116 billion to the Republic of Kazakhstan. In 2016, direct payments to the government totaled $4.7 billion.
From 1993 to 2016, Tengizchevroil spent more than $20 billion on Kazakhstani goods and services – $1.9 billion in 2016 alone. In addition, TCO’s Future Growth Project and Wellhead Pressure Management Project is expected to create approximately 20,000 jobs at peak construction and fabrication.
In 2016, Chevron, together with its Karachaganak partners, awarded contracts worth $530 million to Kazakhstani companies for goods and services. Since 1997, the local content in all partner contracts has totaled $6.14 billion.
Since 1993, the proportion of employees at Tengizchevroil who are Kazakhstani has grown from 50 percent to 86 percent. Kazakhstanis now make up 74 percent of managerial and supervisory positions.
As of the end of 2016, all skilled and clerical positions at the Karachaganak operations and 96 percent of professional and engineering roles were filled by local employees. At the managerial level, 80 percent of positions were filled by local employees.
All managers and staff at Chevron’s polyethylene pipe and valve plants are Kazakhstani citizens. Our plants have created about 205 local jobs, including 110 employee positions.
We use the most up-to-date equipment, technology, methods and expertise in our oil and gas business in Kazakhstan. The company deploys all of its technologies with the goal of increasing reserves and production, accelerating development, and reducing costs. Our Kazakhstani workers are exposed to the latest developments in oil field operations.
Chevron works to enhance the technological capabilities of Kazakhstan’s engineers. In partnership with Kazakhstan’s national oil company, KazMunayGas, we started the Core Analysis Laboratory in Aktau, Mangistau oblast. Together, we upgraded the lab with technologically advanced equipment and software in 2016.
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