Page 12 - FSUOGM Week 31 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Chevron gives update on Tengiz expansion

KAZAKHSTAN CHEVRON said in a July 30 update that the Johnson, executive upstream vice president at
completion of the $45bn expansion of Kazakh- Chevron, was set to say at a Q2 investor call on
The expansion is aimed stan's Tengiz oil field, the primary source for July 30, according to a script released in advance.
at lifting the field's CPC crude blend, has been delayed until mid- The WPMP component is set to be delayed
production capacity to 2024 due to the COVID-19 pandemic. to mid-2023 from late 2022 and the FGP com-
850,000 barrels per The expansion project is aimed at lifting the ponent is delayed until around late 2023 and
day. field’s production capacity to 850,000 barrels per mid-2024 from the original completion date of
day (b/d) of crude, or 1mn b/d of oil equivalent, mid-2023.
which includes gas and gas liquids, and thereby "Our cost target remains $45.2 billion as
give CPC volumes a major boost. Chevron cost reduction efforts and favorable exchange
had already noted the likelihood of a delay to rates offset an estimated $1.9 billion of incre-
the Future Growth Project (FGP) and Well- mental costs associated with COVID," Johnson
head Pressure Management Project (WPMP). was to say. "The COVID costs include mitiga-
The two sub-projects under the overall Tengiz tion efforts, de-mobilization and remobili-
expansion would have involved deploying tens zation costs, as well as the expected schedule
of thousands of workers to a remote site on the extension.
eastern shores of the Caspian Sea along with a "Although the total project cost target is
major logistical exercise for shipping modules unchanged, we have increased the project con-
via the Russian canal system. tingency to $1.9 billion, to recognize the sched-
"At FGP-WPMP overall progress is at 84%, ule uncertainty associated with the virus and its
with field construction 69% complete. We've variants. The project is currently at peak work-
recently reviewed our cost and schedule targets. force and our primary focus is to mitigate the
At this point, the net schedule extension from impact of the virus with vaccinations, testing,
the pandemic is expected to be roughly a quar- and isolation protocols to enable workforce pro-
ter for WPMP and two quarters for FGP," Jay ductivity." ™

Caspian Sunrise shares surge after

successful horizontal well

KAZAKHSTAN SHARES in Kazakhstan-focused junior Caspian trading on July 27.
Sunrise surged on July 27 after the company The BNG asset includes the shallow MJF
The company has had announced promising results from the first structure, which is already in production, and
setbacks at its deeper horizontal well at its flagship BNG asset in the deeper zones that Caspian Sunrise has been
wells. country’s west. test-flowing. The deeper drilling needed to tar-
The well was drilled into the MJF struc- get these zones is costlier, but the rewards are
ture and yielded 645 barrels per day (bpd) potentially much greater. But the company had
of crude over three days, Caspian said. At suffered delays and technical setbacks at its deep
this rate, the company’s total output would wells, and has therefore focused for the time
increase by around 50%. Oil from the well being on maximising output from the shallow
will be sold at international rather than wells.
domestic prices. Another difficulty for Caspian has been
Caspian plans to drill additional horizon- the low payment it receives for domestic oil.
tal wells into the MJF structure and is awaiting Obtaining export permits for oil is often a slow
a final licence upgrade at the South Yelemes and arduous process for junior producers in
structure. Kazakhstan, where the government tries to keep
“For some time we have believed that the some oil supply back for the domestic refining
shallow structure at the BNG contract area, industry. These permits are sometimes granted
namely the MJF structure and the South on a well-by-well basis.
Yelemes, would be suitable for a horizontal well,” Until April, Caspian was receiving only $6
Caspian’s non-executive chairman, Clive Carver, per barrel for oil sold domestically, although this
said in a statement. “The company now plans to was then more than doubled to $12.4 per barrel.
drill further horizontal wells on each structure.” But this still lags far behind international prices,
The news lifted Caspian’s share price by with Brent currently trading at close to $75 per
19.15% to GBP0.028 in the first few hours of barrel. ™

P12 www. NEWSBASE .com Week 31 03•August•2021