Cost to increase oil production from Chevron-operated Kazakh field rises by $1.5 billion

(Bloomberg) – The cost of a major development led by Chevron Corp. to boost oil production at Kazakhstan’s giant Tengiz field has risen by about $1.5 billion, the latest in a string of cost overruns and delays, according to people familiar with the matter.

Chevron announced in October that the budget for Tengiz was rising by 4% to almost $47 billion due to a slower than expected startup. That figure will now be about $48.5 billion, the people said, asking not to be named because the information isn’t public.

The expansion of the Tengizchevroil venture, known as the Future Growth Project, has delayed its full startup into the second quarter of next year. The project has gone well beyond its initial budget of $37 billion and the completion date had already been rescheduled twice from the original plan of mid-2022.

“Tengizchevroil continues to work with its partners and the republic of Kazakhstan government to advance the safe commissioning and start-up of the Future Growth Project-Wellhead Pressure Management Project,” a spokeswoman for the venture said by email. She declined to comment on specific budget numbers.

Kazakhstan’s Energy Ministry didn’t immediately respond to a request for comment.

Tengizchevroil is 50% owned by Chevron, while Exxon Mobil Corp. and state-owned KazMunayGas have a 25% and 20% stake in the venture, respectively.