highlightsofoperation

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.

Chevron holds a 50 percent interest in Tengizchevroil, which operates the field. The joint venture is also developing the nearby Korolev Field.

Lear

The Tengiz Field is one of the world’s deepest operating supergiant oil fields, with the top of the reservoir at about 12,000 feet (3,657 m) below ground.

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. A major expansion of the pipeline was recently completed.

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.

businessportfolio

business portfolio

Kazakhstan worker

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). Combined net daily production in 2017 from the Tengiz and Karachaganak fields averaged 326,000 barrels of liquids and 533 million cubic feet of natural gas.

In April 2018, Chevron and TCO partners celebrated 25 years of successful partnership with the Republic of Kazakhstan.

tengizchevroil

25

year anniversary in 2018

tengiz oil production

3

billionth barrel in 2017

FGP-WPMP workforce

30,000+

Kazakhstanis

Tengizchevroil looks ahead
TCO is developing the Tengiz and Korolev crude oil fields in western Kazakhstan. Net daily production in 2017 averaged 272,000 barrels of crude oil, 401 million cubic feet of natural gas and 21,000 barrels of natural gas liquids. All of TCO’s crude oil production was exported through the Caspian Pipeline.

In 2017, work continued on a number of key projects:

  • The Future Growth Project–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 injection 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
Project execution for the FGP-WPMP – the next expansion of the Tengiz oil field – advanced in 2017, with first oil planned for 2022.

The FGP-WPMP is designed to further 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 increasing to approximately 1 million barrels of oil-equivalent per day.

Site infrastructure and facilities construction is well underway at Tengiz. Construction of a new cargo offloading facility for receiving modules and pipe racks is complete at Prorva, Kazakhstan. In October 2016, the first steel was cut, marking the beginning of the Kazakhstani-fabricated component for the FGP-WPMP. Fabrication of process modules is underway in Kazakhstan and South Korea, and gas turbine generators are being constructed in Italy. First module delivery and installation is expected in 2018. Dredging is complete, and three drilling rigs are in operation on the multiwell pads.

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. The field is being developed in phases.

In 2017, net daily production at Karachaganak averaged 33,000 barrels of liquids and 132 million cubic feet of natural gas.

Approximately 33,000 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. Liquids not exported through the pipeline 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 CPC’s Caspian Pipeline, a 935-mile (1,505-km) crude oil export pipeline that runs from the Tengiz Field in Kazakhstan to the Black Sea port of Novorossiysk, Russia. More than 90 percent of the oil transported comes from fields located in Kazakhstan.

The pipeline provides a key export route for crude oil produced from the Tengiz and Karachaganak fields. In 2017, an average of 1.18 million barrels of crude oil per day passed through the pipeline, composed of 1.06 million barrels per day from Kazakhstan and 120,000 barrels per day from Russia. More than 5,000 tankers have been loaded since the CPC began operations.

The Caspian Pipeline capacity expansion project was completed in 2017, achieving a design capacity of 1.4 million barrels per day. The expansion will accommodate a portion of the expected growth in TCO production.

Kazakhstan pipeline

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 extrusion 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 systems, 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.

marketing and retail

Through our authorized distributor, Chevron markets lubricants, coolants and fuel treatments under the Texaco® brand for consumer, commercial and industrial use in Kazakhstan.

inthecommunity

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.

Kazakhstan health workers

health

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 2017, Chevron organized a summer camp for teenagers and a series of public events that focused on healthy lifestyles.

Annually, Chevron donates medical equipment to hospitals and maternity centers in Almaty and Astana and supports professional development of health workers. In 2017, in partnership with the AYALA Charity Foundation, we supported the training of approximately 200 doctors and nurses from children’s intensive therapy departments of Almaty hospitals. The program is aimed at reducing illnesses and mortality among newborns.

Kazakhstan children

education

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 both the workplace and the community. Since the launch of the initiative in 2015, approximately 6,000 young people and 400 teachers in Atyrau have benefited from the interactive training in various life skills as well as in science, technology, engineering and math (STEM).

In 2017, in cooperation with the International IT University, Chevron supported Kazakhstan’s Robocon Competition for schoolchildren. Inspired by the theme Bioenergy for the World, students and their teachers built robots that could deliver biofuels to a bioreactor.

Chevron is also partnering with the U.S. Mission to Kazakhstan to develop and maintain an initiative called MakerSpace in Almaty and Astana. These community-operated spaces enable people interested in computers, machining, technology, science, digital art and creative art to meet, socialize and collaborate on projects that benefit the community. In 2017, the Almaty MakerSpace all-girl team Flash won the Global Grand Prize for their app QamCare at the TechNovation Challenge in Silicon Valley, California.

economic development

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. To date, 20 artisans have opened production centers, employing dozens more.

Chevron partners with the British Council Kazakhstan to help young people – aged 17 through 19 – learn skills for employment and entrepreneurship. Nearly 2,000 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, Astana and Atyrau.

helping communities

In 2016, Chevron launched the Social Impact Hub in Almaty, an initiative that brings together social and creative entrepreneurs with the common vision of working 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 2017, TCO invested more than $1.4 billion to fund social projects and programs for the community and employees in Atyrau. TCO has provided resources for social infrastructure projects, schools, hospitals and clinics and for the construction of water and electric systems.

In education, TCO has programs that focus on STEM subjects, promote English language development and support computer literacy.

The Yntymak Program organizes volunteer activities and fundraising initiatives by engaging TCO employees, their family members and local volunteers. In 2017, more than 260 Yntymak volunteers contributed more than 1,200 hours to the local community. The volunteers organized 46 English Club meetings for 160 students and 17 teachers, visited the Youth House and Children’s Adaptation Center more than 50 times, collected donations of clothes, and fundraised more than $310,00 to support low-income families and people with disabilities.

Volunteers also facilitate in-kind donations from TCO employees. In addition to helping support low-income families, orphanages and people with disabilities, funds raised by the Yntymak Program support computer classes, personal growth training and professional training for Youth House residents.

We also work with our Karachaganak partners to support the community. Since 1998, KPO has contributed more than $367 million to social infrastructure projects in western Kazakhstan.

In 2017, KPO successfully completed the relocation of the villages of Berezovka and Bestau. This project was implemented in accordance with a government of Kazakhstan decree that resulted from the newly set borders of the sanitary protection zone around the Karachaganak Field. In Aksai, KPO commissioned the Sports and Wellness Centre, which consists of a football field, a boxing ring, a 1,200-seat grandstand, a running track, and open areas for basketball, volleyball, tennis, shot put and javelin. KPO also provides medical treatment and recreation for pensioners living in the villages around Karachaganak. In addition, KPO offers scholarship programs and promotes English language development.

“The TCO joint venture is making a significant contribution to the economy. It has breathed life into thousands of Kazakhstani enterprises across diverse industrial sectors."

Nursultan Nazarbayev
President of Kazakhstan

health, environment and safety

Protecting people and the environment is one of Chevron’s core values.

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 15 years – of incident-free operation.

Chevron also invests heavily in protecting the environment. Since 2000, TCO has spent more than $3 billion on measures that have reduced natural gas flaring from its operations by 70 percent. TCO has applied innovative technologies to redirect gas for its own use, for export to consumers and for reinjection into the reservoir.

Kazakhstan buildings

economy

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 TCO’s founding, the company has paid about $125 billion to the Republic of Kazakhstan. In 2017, direct payments to the government totaled $8.5 billion.

From 1993 to 2017, TCO spent more than $24 billion on Kazakhstani goods and services – $2.5 billion in 2017 alone. In addition, more than 30,000 Kazakhstanis, 92 percent of the total project’s workforce in Kazakhstan, are currently working on FGP-WPMP.

In 2017, Chevron, together with its Karachaganak partners, awarded approximately $400 million in contracts to Kazakhstani companies for goods and services. Since 1997, the local content in all partner contracts has totaled $6.54 billion.

Kazakhstan workers

Since 1993, the proportion of employees at TCO who are Kazakhstani has grown from 50 to 83 percent. Kazakhstanis now make up 67 percent of managerial and supervisory positions.

As of the end of 2017, all skilled and clerical positions at the Karachaganak operations and 95 percent of professional and engineering roles were filled by local employees. At the managerial level, 76 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 over 200 local jobs, including 134 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.

recordofachievement

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’s largest oil and gas fields.
  • 2001 – The Caspian Pipeline Consortium’s crude oil export pipeline began operations from the Tengiz Field 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. 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.
  • 2016 – Chevron and partners announced approval for the final investment decision of the Future Growth Project–Wellhead Pressure Management Project, the next major expansion of the Tengiz oil field.
  • 2017 – The Tengiz Field produced its 3 billionth barrel of oil.
  • 2017 – The CPC completed the Caspian Pipeline expansion project, achieving a pipeline capacity of 1.4 million barrels per day.
  • 2018 – Chevron and TCO partners celebrated 25 years of successful partnership with the Republic of Kazakhstan.
Kazakhstan worker in action
contact

contact

Chevron Eurasia Business Unit

CDC Center One, 7th floor
240G Nursultan Nazarbayev Avenue
Almaty, Kazakhstan, A26F8D4
Telephone: +7 727 298 0662

disclosure;forward-lookingstatements

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Website contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “could,” “should,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on schedule,” “on track,” “is slated,” “goals,” “objectives,” “strategies,” “opportunities” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward- looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemicals margins; the company's ability to realize anticipated cost savings and expenditure reductions; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of the company's suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats and terrorist acts, crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries, or other natural or human causes beyond its control; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; the impact of the 2017 U.S. tax legislation on the company's future results; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company's ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 19 through 22 of Chevron’s 2017 Annual Report on Form 10-K. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.