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TENGIZ: A Culture of Hard Work, Innovation, Continuous Improvement and Winning Together
In December 2021, Tengizchevroil (TCO) reached an incredible milestone in its 28-year history, by surpassing 500 million tonnes (4 billion barrels) of crude oil production since the founding of the company. The partnership is a shining example of the tremendous results that can be achieved together. TCO’s General Manager Operations, Jackson Baker, shared with Petroleum magazine the story of TCO’s continuous investment in expanding production capacity which has gradually led to a 26-fold increase in the annual total oil production at Tengiz.
Q. The Tengiz and Korolev fields are prolific assets that have enabled Kazakhstan to become a major producer in the international oil markets and a key country on the global stage. How have TCO’s production volumes in Tengiz changed over the last 28 years?
A. First of all, it's an honor to be a leader in a company like TCO and to work on a project like Tengiz. The scale, complexity and challenges, as well as the opportunity and the future that remains in front of this supergiant oilfield, is really exciting, and there are decades and decades of resources to recover.
Throughout the company’s 28-year history, there have been several investments in new production and facilities, as well as in the application of the latest oilfield technologies, that have helped TCO achieve its recent 500 million tonnes production milestone.
Production began in 1991, before the founding of TCO, when the Complex Technology Line -1 (KTL-1) was launched. KTL-1 expanded production to 1.9 million tonnes per year by the end of 1994. In 2001, the KTL Train 5 and Program 12 expansion projects increased annual production again to 12 million tonnes. And in 2008, the Second-Generation Plant and Sour Gas Injection (SGP-SGI) projects were put into operation, more than doubling production to 25 million tonnes per year.
TCO’s next major expansion project, the Future Growth Project- Wellhead Pressure Management Project (FGP-WPMP) is currently progressing, and the total project is around 89% completion. FGP-WPMP will help increase production by a further 12 million tonnes per year, bringing TCO’s total production to 39 million tonnes per year when the facilities are fully operational.
Behind all these major capital investments and production milestones are incredible stories about the people of TCO, their human energy, and the role our culture plays in helping unite us around our main priorities of protecting people and the environment while working together to unlock the full potential of Tengiz. Our workforce has driven innovations in process engineering, design engineering, production optimization, enhancement projects, and turnaround maintenance upgrades, that have helped further expand plant capacity. A great example of this is how SGP/SGI plant capacity increased by almost 17 percent between 2011 and 2021. Our people are at the heart of our achievements.
Q. This milestone is a great achievement, however does this mean that you have increased your environmental impact?
A. Protecting people and the environment is TCO’s number one priority. We believe that operating our facilities in a safe and reliable manner as well as improving our operational performance, are key enablers to minimizing our environmental footprint. TCO is committed and supporting Kazakhstan to meet its Nationally Determined Contribution (NDC) Obligations as per the Paris Agreement. This is not new to TCO. Since 2000, we have invested over $3 billion in projects to reduce our total emissions. For example, between 2000 and 2020, TCO reduced air emissions intensity by 71%. Additionally, in 2020, we achieved the lowest flaring performance over the previous five-year period, a reduction of 67.8% compared to 2017.
Q. Please can you elaborate on how Kazakhstan has benefited from the 500 million tonnes of produced crude oil.
A. As you mentioned earlier, since TCO’s inception, we have helped enable Kazakhstan to become a major oil producer and a key player on the global stage. The company’s record of performance in delivering safe and reliable supplies of energy has fueled the country’s economy and helped deliver more than $160 billion in direct financial payments to the country, including more than $39.3 billion spent on goods and services. Over the same time period, around 310,000 jobs have been created across the country. A study by IHS Markit and KIMEP University, showed that over a 10-year period, 1 job at TCO, supported another 39 jobs across the economy. This is something we are incredibly proud of.
Over the last 28 years, TCO has invested more than $2.2 billion into social projects and programs in Atyrau Oblast for the community and its employees. Two programs have been key: the Egilik voluntary social infrastructure program and the Community Investment Program (CIP). Through the Egilik program, we focus on the construction of social infrastructure facilities like kindergartens, schools, and parks (134 facilities have been implemented to date). Through CIP (around 94 projects), we support long-term capacity building through the promotion of social entrepreneurship, and the availability of quality of education and healthcare.
Another area I would like to highlight is the work we have been doing since the start of the COVID-19 pandemic. To date we have allocated $18.3 million to support local communities in the ongoing fight against the virus, including the purchasing medical equipment and supplies for Atyrau Oblast.
Q. What new advanced methods and technologies have been applied in Kazakhstan during the last 28 years? Were these unique technologies implemented in Kazakhstan only?
A. Technology, innovation and human ingenuity are an important part of the TCO story. Over the years, have applied new technologies and methods in Tengiz which have been adapted to the reservoir’s impressive size, scale and complexity.
There are only 6 fields in the world that have Tengiz-type reservoirs in which gas injection has been used as a mechanism to recover oil. High-pressure gas injection is very rare in our industry and unique to Tengiz. TCO’s outstanding reservoir modeling capabilities allow us to better understand the field, optimize development and maximize recovery. We have utilized Reservoir Modelling technologies since 2010 for all production forecasting needs and developed a state-of-the-art Dynamic Data Integration workflow, which enables us to utilize all available data for more accurate reservoir characterization. In addition to horizontal drilling technologies, which are common across the industry, TCO has introduced nitrogen cap drilling, which is a unique technology for this type of reservoir.
Another technological achievement that stands out to me is our pipeline integrity management program, which centers on our ability to proactively inspect equipment. Some of the technologies we use to repair equipment in our plants, such as metal spray techniques, are very innovative, not necessarily unique to Kazakhstan, but important in our operations.
I have worked on several major global energy assets in my career and I'm very impressed by TCO’s reliability programs. The competencies of our teams working on asset integrity, reliability, turnarounds, and routine maintenance are exceptional. Our focus on quality during the turnarounds enables TCO to target five years of reliable operational runtime for the facilities. I think the human capability that we have here in TCO is a key enabler of our success and our future growth, in addition to ongoing investments in facilities and technologies, to support continuous safe and reliable operations for years to come.
Q. If you have to focus on one technology that will be in high demand in the future, what would that be?
A. I would say data science and data analytics. We have gained massive datasets in 28-years of operations, so the ability to gain greater insights from our data and make decisions that can improve our business, environmental, or safety performance are crucial for our future.
TCO is already leaning in to take advantage of this opportunity by progressing organizational capability in multiple dimensions. We have grown the number data scientists by 130% since 2018, established a Digital Scholar program that sends two TCO employees a year to earn a master’s degree in data science / analytics to United States, to the Massachusetts Institute of Technology (MIT) and Rice University and implemented an Automated Machine Learning platform to enable business subject matter experts across the value chain to harness the power of our rich and growing data sets. Given the large growth of our asset base and number of real-time data points with FGP, I’m extremely excited about the opportunities of data science offers for our business moving forward.
Q. Executing this work and continuing to implement advanced technologies requires a strong workforce. How does TCO develop a local workforce?
A. When I first came to Kazakhstan, I was impressed by the skills, energy, and passion of our local employees. Kazakh culture, with its strong sense of family and teamwork, makes the TCO organization stronger and creates a sense of shared purpose and pride.
TCO has continuously invested in enhancing local capabilities in drilling, production operations, health and safety, reservoir stimulation, and other key areas, some of which did not exist in Kazakhstan at the time of the company’s founding. Actually, the scale and complexity of the Tengiz reservoir and its operations itself provide a great training ground and learning opportunity for our teams.
We invest in developing the technical capabilities of our workforce across many areas, including reservoir management, process engineering, and reliability engineering, to name a few. We also leverage opportunities with our shareholder companies, notably Chevron and ExxonMobil to send people on assignments outside of TCO, to enhance their professional development, and enable them to return with knowledge and best practices that can be applied in Tengiz. To date, around 6,500 people have participated in these international trainings and assignments.
Another thing that struck me when I first came to Kazakhstan is the culture of embracing new ways of working and the passion around continuous learning. Our reservoir, facilities, engineering and maintenance teams have tirelessly pursued and found solutions that have helped grow the capabilities of our operations. We have a culture of embracing continuous learning and development, and always striving for improvement.
Over the last few years, we have been focusing on growing our digital competencies across through efforts like “Digital Yurt”, hackathons and other skill-building opportunities.
We have large operations and maintenance organizations that continuously focus on competency development. The operator competency development group runs a three-year structured operator and maintenance development program that all operators go through to obtain full qualifications. The program includes schooling and mentoring components, which have really proven to be key enablers of operational readiness.
Q. What about sulfur? What is happening with sulfur production and how profitable is the sulfur market now?
A. Sulfur is one of the products that TCO markets along with crude oil, natural gas, butane and propane. Historically, sulfur has not been a significant contributor to TCO’s revenue. In order to improve environmental safety, we have commissioned a new sulfur granulation plant at Tengiz which enabled us to process almost all liquid sulfur produced at the facility.
Q. What about Kazakhstani Content? We hear that it is difficult to get a contract with TCO. Is that true? Why?
A. One of TCO’s strategic intents is the development of Kazakhstani Content (KC). TCO remains the largest contributor to KC in the country. Since 1993, have invested more than $39.3 billion on Kazakhstani goods and services and we continuously look for opportunities to expand partner relationships with local providers. We continue to be a driver for KC through our support for the Machine Building Center, which is designed to increase product localization in the oil and gas industry.
TCO uses a fair and transparent contracting process that leverages the Supplier Expression of Interest (SEOI) portal to identify potential business partners. We encourage all interested parties to register on the SEOI portal for current and future opportunities. Furthermore, to promote transparency, we post our annual contracting and procurement plan on our external website to ensure the market knows about all potential opportunities at TCO.
We strive to develop and maintain strong business relationships with customer-oriented suppliers who have a strong safety culture, a strong track record of reliability, strong cost management skills, and quality products and services with competitive prices and innovative business solutions. Tengiz is a complex field, so we have high expectations for ourselves and our business partners to ensure effective management. Our work affects the lives of tens of thousands of people across Kazakhstan, and it affects the lives of our customers around the world who rely on safe and affordable supplies of energy. At TCO, we are proud to partner with organizations who share our aspirations and high expectations – and like us, who are always striving to innovate and improve.
Q. In Kazakhstan, we have deep appreciation for the early veterans of the industry who developed the field before 1993. What are your thoughts on this?
A. I have the utmost respect for the pioneers of Tengiz and the oil and gas industry in Kazakhstan. We are grateful to these veterans for their hard work and dedication to discover and develop one of the world’s most technically challenging oil fields. They left a strong foundation for future generations in Kazakhstan.
I had the pleasure to engage with a number of these veterans directly and hear stories about the early days in Tengiz. It’s hard to imagine that these pioneers launched operations in Tengiz relying on Soviet diesel generators on rail cars. You can still see the rail lines at the station where they used to park the generators. Today, TCO has gas turbine generators. You see how much has changed in 30 years, which is a pretty short period of time in the big picture of the oil and gas industry – and you imagine, through technology and innovation, how much it will have changed in another 30 years
In my view, the best way for us to show appreciation is to continue to honor the legacy of the veterans of Tengiz. They worked tirelessly in a very challenging environment and made a lot of sacrifices for the industry. They had high expectations for better and more sustainable future for all and our job is to honor their legacy through our dedication to maintaining safe and reliable operations; lowering the carbon intensity of our operations; and importantly, our culture – of working hard, innovating, continuously improving, and winning together as one team. I’m excited about the future, the role we play in providing reliable, affordable, and ever cleaner energy, and I couldn’t be prouder to be part of this journey and the story of Tengiz.