Tengizchevroil LLP Announces Approval of Final Investment Decision for Tengiz Expansion

Atyrau, 5 July 2016 – Tengizchevroil LLP (TCO) today announced it has received approval from its partners on the final investment decision for the Future Growth Project and Wellhead Pressure Management Project (FGP-WPMP), the next expansion of the Tengiz oil field in western Kazakhstan. FGP-WPMP is currently estimated to cost US $36.8 billion, which includes contingency and escalation. First oil is planned for 2022.

FGP will use sour gas injection technology, successfully developed and proven during TCO’s previous expansion in 2008, to increase Tengiz crude oil production capacity by about 12 million tonnes per year/260,000 barrels per day to about 39 million tonnes per year/850,000 barrels per day, with peak rates exceeding 900,000 barrels of crude oil per day. While FGP will expand production, WPMP will keep the existing Tengiz plants at full capacity by lowering the flowing pressure at the wellhead and then boosting the pressure to the inlet requirements of the six existing processing trains.

“This decision made by major international companies re-affirms that the Republic of Kazakhstan is a country with favorable business-climate where long-term investments can be made with confidence,” said Kanat Bozumbayev, Minister of Energy for the Republic of Kazakhstan. “We welcome the decision by TCO’s partners and hope for further cooperation to successfully execute the project.”

“FGP-WPMP is now ready to move forward for the benefit of the Republic of Kazakhstan and TCO shareholders,” said Ted Etchison, TCO General Director. “TCO is confident that these world-class projects will build on our long partnership with Kazakhstan to deliver stable, reliable Tengiz production to benefit the future generations of Kazakhstan.”

Anuarbek Jakiyev, TCO Deputy General Director, said: “The creation of jobs, the purchase of products and services and the ‘multiplier effect’ throughout Kazakhstan’s economy are significant. FGP-WPMP will leave a legacy of new capabilities for our country’s future -- in engineering, high-tech equipment servicing, project management, construction and fabrication.”

FGP-WPMP will generate approximately 20,000 jobs during peak construction.

Since 1993, TCO has invested more than $20.8 billion on Kazakhstani goods and services. TCO has engaged Kazakhstani entities to participate in FGP-WPMP in engineering, procurement and fabrication services and has pre-screened more than 1,600 Kazakhstani companies to date.

As of FID, FGP-WPMP has completed the front-end engineering and design (FEED) phase and about 52 percent of detailed engineering, and is currently engaged in long-lead procurement and early construction works for key project infrastructure at site in Tengiz. TCO partners and the FGP-WPMP team continue to refine execution plans to increase execution confidence and optimize project delivery.

Tengizchevroil LLP is a Kazakhstani partnership that explores, develops, produces and markets crude oil, LPG, dry gas and sulfur. TCO conducts its operations in accordance with world-class safety and environmental standards. In April 1993, Tengizchevroil was formed between the Republic of Kazakhstan and Chevron Corporation. Current partners are: Chevron Overseas Company, 50 percent; KazMunayGas NC JSC, 20 percent; ExxonMobil Kazakhstan Ventures Inc., 25 percent and LUKARCO B.V., 5 percent.