KIOGE-2024
Chevron in Kazakhstan: Ambitious Goals and a Mutually Beneficial Partnership
Chevron, one of the world’s leading integrated energy companies, has been partnering with Kazakhstan since 1993. The company believes affordable, reliable and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance the business and the industry.
In addition to advancing its oil and gas business, the company aims to lower the carbon intensity of its operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies.
Chevron is proud of its long-standing partnership with the Republic of Kazakhstan, which contributes to the growth of Kazakhstan's economy, creation of new jobs in the country, support of local businesses, sustainable local communities, the empowerment of people, and the promotion of investments in profitable local enterprises.
As one of Kazakhstan's leading private oil producer, Chevron holds stakes in two of the country's three largest oil fields, Tengiz and Karachaganak. It is also the largest private shareholder in the Caspian Pipeline Consortium (CPC), through which over 90% of Kazakhstan’s oil is exported to global markets, and it is the 100% owner of the Atyrau Polyethylene Pipe Plant.
The First and Largest Foreign Investor in Kazakhstan
Since the establishment of the Tengizchevroil joint venture in April 1993, Chevron became the first major Western oil company to enter the Central Asian region. According to geological estimates, the Tengiz and Korolev fields within the Tengizchevroil (TCO) contract area contain 1.4 bln metric tons of recoverable oil (11.5 bln barrels). Chevron holds a 50% stake in TCO. In 2023, TCO’s production amounted to 28.9 mln tons (230.6 mln barrels).
In 2016, the TCO participants announced the final investment decision on the Future Growth Project – Wellhead Pressure Management Project (FGP-WPMP), the next phase of the large-scale expansion of the Tengiz field’s production capacity. FGP is expected to increase production by approximately 12 mln tons per year or 260,000 barrels per day, bringing the total production to around 39 mln tons per year or 850,000 barrels per day.
The FGP-WPMP is undoubtedly a national project of great significance, which, beyond achieving production growth at Tengiz, will leave a legacy for the Republic of Kazakhstan, including a trained and skilled local workforce, technology transfer through partnerships with international companies, and modernized infrastructure in the region.
The Karachaganak field, developed by the international consortium Karachaganak Petroleum Operating B.V. (KPO), is one of the largest oil and gas condensate fields in the world, with estimated reserves of around 59.4 trillion cubic feet of gas and approximately 13.6 bln barrels of liquid hydrocarbons. Chevron holds an 18% share in the Karachaganak project.
In 2023, KPO produced approximately 143 mln barrels of oil equivalent in the form of stable and unstable liquid hydrocarbons, raw gas for export, and refined gas for domestic use. Since the signing of the Final Production Sharing Agreement in 1997, parent companies have invested about $31.956 bln in the development of the field.
Chevron holds a 15% stake in the 935-mile (1,511 km) export oil pipeline of the Caspian Pipeline Consortium (CPC), which runs from the Tengiz field in Kazakhstan to the Black Sea port of Novorossiysk in the Russian Federation.
The CPC pipeline has a nominal capacity of approximately 1.7 mln barrels per day. About 90% of the transported oil comes from fields located in Kazakhstan: Tengiz, Karachaganak, and Kashagan. Around 15.6 mln tons per day (335,000 barrels per day year on year) of Chevron’s oil production from Tengiz and Karachaganak fields is transported through this pipeline.
In 2023, CPC transported approximately 64.1 mln tons (~500 mln barrels) of oil produced in Russia and Kazakhstan, and since its inception, CPC has loaded over 8,500 tankers at the Marine Terminal in Novorossiysk.
In its day-to-day operations, Chevron actively engages with the government and state authorities of Kazakhstan and with national companies. The national company KazMunayGas is Chevron’s partner in TCO with a 20% stake and in KPO with a 10% stake. In July 2024, Chevron and the national company QazaqGaz signed a cooperation agreement for geological exploration at the Zhalibek site in the Aktobe region, near the Zhanazhol and Urikhtau fields. In the first stage, Chevron will reprocess the available seismic data and develop technical interpretations.
Economic Diversification and Local Content
Chevron supports Kazakhstan’s goal of developing domestic production and diversifying its economy. In 2003, the company launched the Atyrau Polyethylene Pipe Plant (APPP).
The plant’s six production lines have an annual capacity of 16,000 tons of polyethylene pipes. The facility employs innovative technologies and manufactures pipes that were previously imported into the country. Currently, APPP is modernizing its production lines and implementing advanced multilayer pipe manufacturing technologies. This innovation will increase production efficiency and optimize processes, reducing production costs and helping meet growing market demand. The modernization is a crucial step in the plant’s development and contributes to the further diversification of Kazakhstan’s economy.
With the support of the Ministry of Energy of the Republic of Kazakhstan, Chevron established the Chevron Direct Investment Fund Ltd (CDIF), an investment mechanism aimed at supporting Kazakhstan’s economy by investing in local enterprises across various sectors, including, but not limited to, production, oil and gas industry services, environmental protection, and information and digital technologies. CDIF currently manages an investment pool of $248.5 mln.
After extensive groundwork, CDIF executed investment agreements totaling up to $41 mln in 2023 with two Kazakhstani companies: top.kz, a business services marketplace, and Orhun Med Limited, a rapidly growing medical company in Kazakhstan. Both companies plan to use CDIF investments to expand their operations, create additional jobs, and implement necessary technologies in Kazakhstan. Both enterprises have demonstrated strong business models with significant potential to contribute economically and socially to Kazakhstan’s development and met all of CDIF’s selection criteria.
Investments in Health, Safety, and the Environment
Protecting people and the environment is one of Chevron's top priorities.
Since its inception in 1993, TCO has prioritized occupational health, safety, and environmental protection. All TCO operations align with the corporate strategy of being a safety and environmental stewardship leader.
Since 2000, TCO has invested approximately $3.2 bln in environmental initiatives. During this period, total emissions per ton of oil produced have been reduced by 76%. As of the second quarter of 2024, TCO’s gas utilization rate reached 99.3%, and water reuse during the same period stood at 47%.
In 2023, TCO supplied all of its commercial gas to the domestic market, accounting for 33% of Kazakhstan’s total domestic gas consumption. In the first six months of 2024, nearly all 575 mln cubic meters of commercial gas produced were delivered to the domestic market via Kazakhstan’s gas pipeline. Notably, residents of the Zhylyoi district, where TCO’s production facilities are located, receive gas at the lowest price in Kazakhstan.
TCO also provides 100% of the propane feedstock for Kazakhstan's first polypropylene production complex, Kazakhstan Petrochemical Industries Inc.
KPO is equally committed to the highest environmental standards. Since 1998, the company has spent more than $455.4 mln on environmental protection measures. As of the first half of 2024, the gas utilization rate at Karachaganak reached 99.96%, a world-class performance.
Another key performance indicator is employee safety, which is rigorously monitored across all Chevron projects. TCO is a global leader in safety and environmental protection. Since its first day of operation, APPP has maintained a zero-lost-time injury rate. The plant’s workforce demonstrates high productivity through continuous training and weekly safety inspections.
Supporting the Country's Economic Development
Chevron takes pride in its efforts to increase local content. Since 1993, TCO has invested over $49.2 bln in domestic goods and services. In the first half of 2024, TCO purchased approximately $1.5 bln worth of Kazakhstani goods and services, including more than $760 mln under the Future Growth Project – Wellhead Pressure Management Project (FGP-WPMP).
KPO also contributes to the development of local suppliers. Currently, more than 6,298 Kazakhstani suppliers are registered in the supplier database. Since 1997, the level of local content in all of the company’s contracts has exceeded $10.1 bln, including $756.1 mln in local content in 2023.
TCO Financial Payments
The economic benefits of TCO to the Republic of Kazakhstan are substantial. From 1993 to the first half of 2024, TCO made direct financial payments to Kazakhstan exceeding $196 bln, including wages paid to Kazakhstani employees, procurement of local goods and services, payments to state-owned companies, profit distribution to Kazakhstani shareholders, and taxes and royalties paid to the government.
According to a study by S&P Global, over the past decade, TCO's operations have annually contributed approximately 11% to Kazakhstan's gross domestic product (GDP). Together with its contracting companies, TCO has provided around 30% of the country’s state revenues.
Social Responsibility
True to its mission, Chevron significantly contributes to building human and institutional capacity, developing the local economy, and fostering long-term relationships with communities in the countries and regions where it operates.
The company and its partners in Kazakhstan have implemented numerous social investment programs benefiting hundreds of thousands of Kazakhstani citizens. Since 1993, Chevron has invested around $500 mln in social projects, initiating over 300 programs with over 30 local community partners.
In 2020, Chevron was one of the first and largest sponsors in Kazakhstan to respond to the COVID-19 crisis, donating over $20 mln in medicines and equipment.
In the spring of 2024, TCO allocated 2 bln tenge for emergency assistance to combat flooding in the Zhylyoi district and the Atyrau region, funding the construction of a 16 km dam (the Almaly project), post-flood recovery efforts and the provision of 4.5 tons of humanitarian aid, collected together with volunteers and donations from TCO employees.
Since 1993, TCO has directed more than $2.9 bln to fund various social projects for the people of the Atyrau region and TCO employees.
KPO is also actively involved in financing social programs. From 1998 to the end of June 2024, the company’s total investment in the development of social infrastructure in the West Kazakhstan region amounted to $800.7 mln.