KAZAKHSTAN ENERGY WEEK – 2023
Chevron and Kazakhstan: 30 Years of Inspiring Partnership
Chevron proudly reflects on its 30-year history of partnership with the Republic of Kazakhstan. Throughout this period, this collaboration has acted as a catalyst for economic growth, job creation, support for Kazakhstami enterprises, local community development, and the pursuit of key sustainable development objectives.
In April 1993, Chevron began partnering with the young country on the development of the Tengiz oil field, one of the world’s largest yet also among its most challenging in terms of exploitation. Its operation posed significant risks associated with abnormal reservoir pressure and a high concentration of hydrogen sulfide. The presence of global technology and expertise for safely extracting high-sulfur oil and gas positioned Chevron advantageously, leading the Kazakhstani government to invite the company to participate in the comprehensive Tengiz field development project.
As a major foreign investor, Chevron also engages in Kazakhstan with the development of the unique Karachaganak gas-condensate field and stands as the largest private shareholder of the Caspian Pipeline Consortium, facilitating the export of Kazakhstani oil to global markets.
Contribution to the Kazakhstani Economy
According to international research firm S&P Global, from 2010 to 2021, Chevron's contribution (both directly and through joint ventures) to the Kazakhstani economy, in terms of total annual production value, averaged $9.6 bln annually, representing 5.17% of the country's nominal GDP. An additional 0.95% of the nominal GDP (equivalent to $1.8 bln) was attributed to purchases of goods and services from Kazakhstani manufacturers. For every $100 of net revenue generated from Tengiz production, over $61 is reinvested into the Kazakhstani economy, fueling further growth.
The Tengizchevroil (TCO) joint venture stands as the Republic of Kazakhstan's top taxpayer and makes the most significant economic contributions. In December 2022, the Committee of State Revenues of Kazakhstan's Ministry of Finance recognized TCO as the country's best taxpayer in the Subsoil User category.
In 2022, TCO spent $5.3 bln on goods, work, and services from Kazakhstani suppliers. Since 1993, the company has made direct financial payments totaling $176 bln, including $43.6 bln on local goods and services. By the end of 2022, Kazakhstan’s nationals occupied 94.8% of all positions in TCO's primary operations, up from 50% in 1993.
Chevron has become a pivotal force in job creation within the region. According to S&P Global, Chevron, on average, has employed over 2,800 Kazakhstanis annually. The collective compensation for these employees amounted to approximately $146 mln.
S&P Global conducted an analysis of Chevron's economic impact on the country from 2010 to 2021. The study found that for every job at Chevron in Kazakhstan, there are an additional 33 jobs in the country's economy facilitated by Chevron. This includes positions in professional services, construction, manufacturing, transportation, retail trade, among other sectors. Roughly 96,000 individuals held positions supported by Chevron.
Development of Local Manufacturers
Over the past twelve years, Chevron has allocated $18 bln towards the development of local businesses in the Republic of Kazakhstan. These expenditures stimulate productive economic activity across Chevron's extended supply chain, yielding an additional $1.5 bln annually in sales for local Kazakhstani businesses.
Chevron, in collaboration with the Ministry of Energy of the Republic of Kazakhstan, established the Chevron Direct Investment Fund Ltd (CDIF). This fund serves as a tool to bolster the Kazakhstani economy by investing in commercial enterprises across a variety of sectors in Kazakhstan. These sectors encompass, but are not limited to, the production of goods and provision of services in the oil and gas industry, environmental protection, and information technology, including digital technologies. The fund's budget stands at $248.5 mln. As of December 2021, the company's website, www.cdif.kz, has been operational, accepting applications for investment project financing.
Supporting Diversification
While Chevron is primarily known for its oil and gas exploration in Kazakhstan, the company has actively fostered the diversification of the Kazakhstani economy by investing in sectors beyond energy. A notable example of such an investment is the Atyrau Polyethylene Pipe Factory (APPF).
Launched by Chevron in 2003, this factory is a pioneer in polymer pipe production in Kazakhstan. With its six production lines, the facility boasts a production capacity of 17,000 tons of polyethylene pipes annually. These pipes, made from high-strength polyethylene like PE-100 sourced from European and other producers, are utilized for water supply, sewage, and gas supply.
The APPF has consistently produced high-quality pipes, resulting in steady demand not just within Kazakhstan but also in the CIS countries. In 2021, the factory rolled out 9,000 tons of pipe products, tripling its volume from the previous five years. By the end of 2022, despite global economic challenges, 7,000 tons of pipes were manufactured.
Investing in the Local Community
Chevron has collaborated with local communities to foster human progress in four primary areas: education, economic development, energy transition, and healthcare. Since 1994, Chevron has contributed more than $450 mln into social investments, spearheading over 300 projects with more than 30 partners. In 2020, Chevron was at the forefront of battling the COVID-19 pandemic, committing over $20 mln to purchase medicines and equipment.
Since 1993, TCO has invested roughly $2.7 bln in social projects and programs, targeting the populace of the Atyrau region and its employees. In 2022 alone, TCO allocated $30 mln to the Igilik social infrastructure program. A significant portion of these funds was channeled into the construction of kindergartens, schools, and other social amenities in the Atyrau region, and purchasing medical equipment for the area's hospitals.
In the realm of education, Chevron backs programs in Kazakhstan that benefit thousands of young people, teachers, and trainers from urban and rural schools. In 2022, in collaboration with the nFactorial professional developer training school, Chevron launched a project. Graduates from this venture secure jobs at leading global IT companies, with the school's mission being to produce 10,000 highly skilled IT professionals.
In partnership with the Caravan of Knowledge Foundation, Chevron executed several programs in 2022, including advanced training and certification for teachers, modernization of school laboratories, lectures, workshops, student competitions and Olympiads, the creation and development of open educational resources following the STEAM methodology, and the establishment of offline and online STEAM spaces.
In September 2022, the Biodiversity Conservation Association of Kazakhstan, in conjunction with Chevron, launched the Students for Nature project. This initiative aims to aid Kazakhstani universities in training future environmental specialists.
All these achievements resonate with the strategic plans and goals of the country. Chevron Corporation takes pride in being a partner of the Republic of Kazakhstan for three decades and remains committed to investing in the country's economic and human potential.