A quarter of a century as the leaderOleg Chervinskiy
Tengizchevroil is celebrating its 25-year anniversary in April and firmly holds the position of leader in the oil and gas industry of the Republic of Kazakhstan. Today, TCO has been ranked number one in the country both for the volumes of produced crude oil and contributions to the Kazakhstan's budget.
Last year, 2017, once again became a record year for TCO - production levels at the end of the year reached 28.7 mln tons of crude oil, which is 4.1% more than in the previous year. In the middle of last year, the joint venture reached a historic milestone of 3 billion barrels of oil produced since its establishment in April of 1993. Also last year, the company sold around 1.38 mln tons of liquefied gas, 7.45 bln cubic meters of dry gas and 2.49 mln tons of sulphur.
Record was also set in the area of safe work: employees TCO and contractors have reached world-class occupational safety, having worked more than 94.5 million man-hours with 4 incidents involving the loss of working days.
Tengizchevroil is also a recognized leader in the field of gas utilization and reduction of its flaring. Since the year 2000, the total volume of gas flaring has decreased by 99%, the utilization volume exceeded 98%. Total specific volume of emissions into atmosphere per ton of produced oil decreased during the same period by 70%, while output increased 2.7 times.
Sulphur pads are completely eliminated at Tengiz, if in the early 2000s 9 mln tons of sulphur, separated from the associated sulphur dioxide, had been stockpiled on the contract territory, in 2015, the company announced the full sale of all available stocks of sulphur. By virtue of TCO, Kazakhstan confidently took place in top ten countries suppliers of sulfur on the world market.
Contribution of the joint venture in Kazakhstan's economy is really impressive - since its establishment in April of 1993 and including the year 2017, it exceeded 125 bln US dollars. In the last year alone, direct financial payments to the Republic of Kazakhstan, including the salaries of Kazakhstani staff, procurement of goods and services of domestic producers and suppliers, payments, fees and charges to state-owned companies and enterprises, dividends payments to Kazakhstani partner NC KazMunayGas JSC, as well as taxes and royalties to the Government budget amounted to 8.5 bln dollars.
Synergistic effect of the activities of the JV Tengizchevroil is not measured only in money, for 25 years of operation, the company gave a tangible boost to the development of local entrepreneurship. Since 1993, TCO purchased goods and services for Kazakhstani suppliers worth more than 24 bln dollars. If in the early 90s the company couldn't find domestic certified suppliers of basic products: workwear, construction materials, food products, etc., today over 2000 of Kazakhstani companies pre-qualified as potential suppliers of the TCO’s Future Growth Project and Wellhead Pressure Management Project, more than 1000 of them have passed preliminary qualification evaluation. More than 500 contracts already awarded. After launch of a full-scale work on the project more than 30,000 Kazakhstan citizens will be involved in it, which is 92% of the total number of staff of the project in Kazakhstan.
It should be noted that over a quarter of a century Tengiz project became a real talent pool for the domestic oil industry. If in 1993, the share of Kazakhstani employees in TCO did not exceed 50%, today it has reached the figure of 83%. As a result of ongoing training and development of personnel more staff promoted to more important positions. Already 156 residents of Kazakhstan have replaced their foreign counterparts on key managerial and technical positions. Staff members, who went through TCO’s training, successfully work in a wide variety of companies both in Kazakhstan and in all parts of the world.
While celebrating quarter of a century anniversary, Tengizchevroil also begins the new stage of its development. In July of 2016, shareholders of the company announced the start of a new project to increase production capacity of the Tengiz field - the Future Growth Project and Wellhead Pressure Management Project. This is a truly unique project, which has no analogues in the world, after its completion in 2022 it will allow to increase the production at Tengiz by 12 million tons of crude oil per year, up to 38-39 mln tons, as well as to increase the oil recoverability factor up to 40%.
Work on FGP is well under way. At the construction site the excavations and grouting of foundations for production facilities are close to the completion. The numbers eloquently speak about the scale of the project. For example, at the stage of preparation for the installation of equipment 33 thousand concrete piles, weighing 6 tons each, were put into the ground. And the length of pipe rack at the new treatment plant will be 1 kilometer.
The objects of FGP-WPMP will be assembled from modules that are specifically made for this project and produced in South Korea, Italy and Kazakhstan. Overall, local content is one of the priorities; it is assumed that with the total cost of the project amounting to 36.8 bln dollars, Kazakhstani suppliers of goods and services will receive not less than one third of these funds. In general, the implementation of FGP-WPMP will have a multiplicative effect in form of creation of new opportunities in engineering design, maintenance of high-tech equipment, project management, construction and manufacturing; as well as in the field of joint ventures establishment between Kazakhstan and foreign companies. Which means: Tengiz project will continue to work for the benefit of the Republic of Kazakhstan and its shareholders.