Caspian region
Record year for Tengizchevroil
The year 2019 was a record year for Tengizchevroil LLP, which is developing the giant Tengiz field in the Atyrau region. Record indicators were achieved in terms of production volumes, local content in procurements, and contribution to the Kazakhstani economy.
TCO’s crude oil production reached a new annual record of 29.79 million tons. Demonstrating a 4% increase compared to 2018. Sales of liquefied and dry gas exceeded 1.3 million tons and 7.9 billion cubic meters, respectively, and more than 2.6 million tons of sulfur were also sold.
The scale of the Tengiz project is evidenced by the fact that the total proven reserves of the Tengiz reservoir are 3.2 billion tons (25.5 billion barrels), and 200 million tons (1.6 billion barrels) in the Korolevskoye field. The recoverable oil reserves of the Tengiz and Korolevskoye fields range from 890 million to 1.37 billion tons (7.1-10.9 billion barrels). The Tengiz reservoir is 20 kilometers (12 miles) wide and 21 kilometers (13 miles) long.
Last year, Tengizchevroil's expenses for the procurement of goods and services from Kazakhstani suppliers also reached a record level, exceeding the amount of 4.6 billion USD. Compared to the same period last year, the increase in costs for products and services of domestic manufacturers was 31%. This figure is a record since the beginning of TCO's operations in 1993.
The main part of the cost was incurred for Future Growth Project (FGP) – Wellhead Pressure Management Project. As part of this project, Kazakhstani companies delivered goods and services worth more than 3.25 billion USD. In total, since the beginning of the FGP-WPMP project, the expenses for the local content amounted to about 8.4 billion USD.
The performance rate for the project exceeded 74% at the end of the year. Production of all 75 pre-assembled racks has been successfully completed at the Yersai production site. The pipeline trestles were safely delivered to the Tengiz field. Production of all five gas turbine generators has been completed at the production site in Avenza, Italy, and they have also been delivered to Tengiz. In South Korea, work continues on the production of pre-assembled racks. By the end of December 2019, a total of 60 modules were shipped from Korea. Work on the production of modules at the production site in Shanghai has been completed. Sea transportation in 2019 was also successfully completed: 235 units of large-sized modular cargo were delivered to Tengiz.
The group of general services continues to provide all critical services at the field. The critical importance services group provided support to construction and operation personnel in 2019 when the number of personnel in Tengiz reached its maximum. Warehouses, a temporary storage area, as well as temporary buildings and structures of contractors for the installation of mechanical, electrical equipment and control and measuring instruments have been put into operation. Work is underway on the construction of the Joint Movements Control Centre (JMCC). This center will be the basis for managing all future TCO production. The basic substation was put into operation, and Phase 4 switching was successfully completed.
On October 30, 2019, the first oil was received at the gathering system; ten wells of the first stage of the high-pressure collection system were put into operation. General construction works and laying of underground utilities at the third-generation plant are continuing. All 44 PARs and all modules of the energy resources section are installed on the foundations. On SGI all modules of section 45 (energy site) are installed on foundations, reassembly of the modules has begun. All 29 PARs are installed on the foundations.
The company has been actively working on the nationalization of personnel throughout the year. Kazakhstani citizens occupy 89% of all jobs and 80% of Managerial and supervisory positions in the company’s base business (excluding FGP-WPMP staff).
Tengizchevroil is celebrating its Community Investment Program (CIP) 10th anniversary this year. The CIP was launched in 2010 and aimed to attract public organizations to address socially important issues in such areas of education, health, ecology, social entrepreneurship, and increasing human capital.
Seven non-governmental organizations (NGOs) successfully executed seven social projects in the Atyrau region in 2019. TCO has allocated over $1 million for these projects as part of the Community Investment Program. Last year, within a framework of CIP, some projects related to tuberculosis prevention among children and adolescents were launched in Atyrau, a laboratory for soil, water, and plant analysis was opened and work to support people with disabilities continued.
It is worth noting that projects implemented within the framework of CIP are increasingly receiving public recognition. Thus, the Yntymak volunteer program took second place in the Corporate Volunteering category in The Best Kazakhstani Volunteer 2019 contest facilitated by the National Volunteer Network. As part of the Yntymak program, TCO volunteers and their families carried out charity activities, educational, social and environmental projects.
In total, 12,000 thousand Atyrau residents became direct beneficiaries of the CIP in 2019. In 2020, TCO is planning to continue working with ten public organizations within the CIP.
The CIP and Egilik voluntary program of social infrastructure projects are key components of TCO corporate responsibility. Since 1993, TCO’s total contribution to social projects in the Atyrau region reached $2 billion.
The joint venture's contribution to the Kazakhstani economy is significant. TCO's direct financial payments to the Republic of Kazakhstan for 2019 exceeded 10.6 billion US dollars. These payments include salaries to Kazakhstani employees, procurement of goods and services from domestic producers and suppliers, payments to state-owned enterprises, dividends to a Kazakhstani partner, as well as taxes and royalties transferred to the State budget. In total, since 1993, direct revenues to the economy of Kazakhstan have exceeded 146 billion US dollars.