UPDATE 1-Chevron-led Kazakh oil venture sees sharp output rise in 2018-19

Mon Jan 28, 2013 7:19am EST

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By Raushan Nurshayeva

ASTANA Jan 28 (Reuters) - Output at Chevron-led Tengizchevroil (TCO), Kazakhstan's largest oil producer, is set to rise by 12 million tonnes per year in the 2018-19 timeframe from last year's 24.2 million tonnes, TCO General Director Tim Miller said on Monday.

Data released by TCO project partner Lukoil this month said the venture's production stood at 25.1 million tonnes (about 503,000 barrels per day) in 2012.

"Our 2012 production was 24.2 million tonnes. This was 3.7 pct lower than our business target of 25.1 million tonnes," Miller told an enlarged meeting of Kazakhstan's Oil & Gas Ministry.

"The primary reasons for this were mechanical problems ... severe weather conditions and transportation restrictions."

The huge Tengiz oilfield, located onshore in western Kazakhstan, is one of three main drivers of Kazakhstan's plans to raise its oil output by 60 percent by the end of the decade.

Kazakhstan is now the second-largest post-Soviet oil producer after Russia.

The vast Central Asian nation of 17 million plans to raise output to 130 million tonnes by 2020 through expansion at the Kashagan offshore field in the Caspian, higher output at Tengiz and the Karachaganak oil and gas field.

Kazakh Oil & Gas Minister Sauat Mynbayev said earlier on Monday Kazakhstan's total oil output was set to rise to 82 million tonnes in 2013 from last year's 79.2 million tonnes.

TCO's output is set to remain at the current level for a few years as the venture has first to implement the Wellhead Pressure Management Project (WPMP) to install a pressure boost facility and drill additional wells post-WPMP to lay the groundwork for the crucial Future Growth Project (FGP).

"The Future Growth Project will expand production capacity by 12 million per year," Miller said. "Start-up of the FGP operation will be in the 2018 to 2019 timeframe."

"We are targeting the final investment decision for the fourth quarter of 2013," he said without specifying the sum.

Chevron holds a 50-percent stake in the venture, while ExxonMobil owns 25 percent, Kazakh state oil company KazMunaiGas has 20 percent and Lukarco, controlled by Lukoil, the remaining 5 percent.

Since TCO's creation in April 1993, the venture's cumulative payments to Kazakhstan had totalled $74.2 billion, Miller said.

"In 2012, total payments exceeded $14 billion for the second consecutive year," he said.

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