CHEVRON EXPANDS KAZAKHSTAN OIL FIELD

Chevron Corp. reported Friday that it has completed an expansion of Kazakhstan’s massive Tengiz oil field, which is expected to pump 1 million barrels a day by the middle of this year.

The $48 billion to $49 billion expansion of the field comes as U.S. President Donald Trump said this week that he would push the Organization of the Petroleum Exporting Countries and its allies, including Kazakhstan, to lower oil prices.

“As far as OPEC is concerned, we will follow whatever the Republic of Kazakhstan decides,” Clay Neff, Chevron’s president of international exploration and production, said in an interview.

Kazakhstan’s oil production plans have put pressure on its OPEC+ partners, who have agreed to cut output much longer than expected. Central Asia’s largest producer has instead announced plans to increase oil output in 2025.

Expansion work at Tengiz, one of the world’s largest oil fields that accounts for about 1% of global production, has been plagued by delays and cost overruns. Now, Neff said, the field will generate $4 billion in free cash flow for Chevron in 2025 and $5 billion in 2026 at a $60 oil price.

Most of the lighter oil will go to Europe and Asia, he added. Tengiz currently produces about 700,000 barrels of oil a day.

Chevron "hit that mark in January, which probably bodes well for the company given previous project delays" in Kazakhstan, RBC Europe Ltd. analyst Biraj Borkhataria said in a note Friday.

Tengiz is at the center of Chevron's efforts to boost production around the world, and the project delays have sent the company's shares tumbling.

Neff emphasized the importance of Kazakhstan's assets in the mining portfolio. Kazakhstan's production is set to reach 1 million barrels of oil equivalent a day in 2025, about the same as Chevron's production in the U.S. Permian Basin, which is also expected to reach 1 million barrels a day this year.

However, Chevron plans to cut its capital spending by about 10% in Permian, which covers the West Texas and New Mexico region.