TengizChevroil to boost oil output at Tengiz field this year

Tom Winterton, the general director of the TengizChevroil (TCO) joint venture, said on the sidelines of an industry conference said that the Tengiz oil field was on track to produce at 10.4 mm tons of crude oil this year. In 1999, he noted, the field yielded only 9.6 mm tons.
He also stated that TCO's revenues might be almost twice as high in 2000 as they were last year due to the increase in production and higher oil prices. The joint venture reported revenues of about $ 1 bn in 1999, he stated.
Oil output levels at Tengiz are expected to keep rising. As Winterton noted, TCO managed to bring its annual production rate up to 12 mm tons in June of this year. By 2005, he said, the Tengiz field will probably be yielding about 17 mm tpy. By 2010 or 2011, he added, the figure might rise to 32 mm tpy.
Winterton stated that output was rising largely as the result of improvements in project infrastructure. TCO has already spent $ 500 mm on the first stage of a project to revamp its field and processing facilities, he said.

Between 2001 and 2005, he added, the venture will spend another $ 1 bn or more to complete the second stage of this project. Most of the money will go to cover the costs of appraisal drilling and preparation of reserve capacity, he said. These efforts will serve to boost oil output significantly provided that world crude prices remain strong, Winterton remarked.
Once TCO wraps up the second stage of its infrastructure work, it may began employing alternative technologies such as gas injection at Tengiz, he added. To date, he stated, the joint venture has spent $ 4 bn on the acquisition of assets and on investment projects.
He was speaking shortly after Kazakhstan's state oil company announced that TCO owed it a debt of about $ 852 mm. Kazakhoil claimed that TCO had failed in 1993, the year of its establishment, to pay $ 820 mm for the assets of Tengizneftegaz, the former operator of the Tengiz field. That sum, plus the approximately $ 32 mm in interest accumulated asof September 1, 2000, is now due to Kazakhoil, which was set up in 1997, the state oil company said.

Equity in TCO is split 50 % to Chevron of the United States, which is serving as the operator of the project; 25 % to Mobil of the United States; 20 % to Kazakhoil; and 5 % to LUKArco, a joint venture set up by Russia's LUKoil and ARCO of the United States.