ExxonMobil it is projected that the Tengiz oil field will approach peak production before entering a period of decline over the next decade. These projections indicate a significant shift for one of Kazakhstan’s key energy assets, with production potentially stabilizing in 2027 and subsequently decreasing to around 500,000 barrels per day by 2035.
ExxonMobil expects Tengiz production to fall to 500,000 barrels per day
ExxonMobil has warned Kazakhstan that Tengiz, the main oil field of the country, would be close to reaching its peak production. After stabilizing in 2027, its output could begin to decline considerably in the following years. According to a presentation the company made to the authorities in Astana, cited by Bloomberg, Tengiz’s production could be around 500,000 barrels per day in 2035 the figure would represent a reduction of approximately 40% compared to its maximum production.
However, these projections are based on a scenario in which no significant additional investments are made to increase production. Sources familiar with the matter indicated that this situation could change and modify the current forecasts. Chevron is the largest shareholder of Tengiz, while Tengizchevroil (TCO) operates the development. Both companies stated that they remain focused on safe and reliable operations, although they declined to comment on their future production plans.
Kashagan emerges as an alternative to the decline of Tengiz
While Tengiz faces a possible production reduction, ExxonMobil it seeks to promote a multi-billion dollar investment in the Kashagan oil field. The goal would be to develop new reserves capable of partially offsetting the projected decline in Kazakhstan’s main oil asset. The proposal envisions a potential joint investment of 80 billion dollars to expand Kashagan. ExxonMobil plans to develop the project through a 50/50 joint venture with the state-owned oil company KazMunayGas.
Specifically, the project would take advantage of the still undeveloped western area of the enormous deposit; according to estimates cited by Bloomberg, this expansion would have the capacity to reach up to 600,000 barrels per day in this way, Kashagan could acquire greater weight in Kazakhstan’s oil production during the next decade if the projected decline of Tengiz ends up materializing.
The investment faces a $150 billion dispute
However, the progress of Kashagan’s expansion depends on outstanding issues between Kazakhstan and the international companies operating in the country. ExxonMobil has reportedly conditioned its potential investment on the resolution of a dispute valued at 150 billion dollars between the Kazakh government and international companies. This is in addition to an environmental fine of $5 billion.
KazMunayGas, for its part, has questioned the information published by Bloomberg regarding the proposal. ExxonMobil declined to comment on the presentation, while the Kazakh Ministry of Energy and North Caspian Operating Company, the operator of Kashagan, also declined to comment. Thus, the evolution of Tengiz and the decisions regarding Kashagan are emerging as key factors for the future of Kazakh oil production. The capacity to incorporate new production will be especially important if Tengiz enters the anticipated decline phase over the next decade.
Source: Rigzone
Photo: Shutterstock
