Exxon Warns Kazakhstan’s Top Oil Field to Peak Within Years
(Bloomberg) -- ExxonMobil Holdings Corp. has told Kazakhstan that the country’s top oil field is already on the cusp of peak output and its production will slump sharply in the coming decade.
The Spring, Texas-based supermajor is seeking to invest billions of dollars in a new oil project at the nation’s Kashagan development, a step that would help to cushion a slide in production at Tengiz, its top deposit.
Tengiz output is set to plateau next year before sliding to about 500,000 barrels a day by 2035 — a slump of about 40% from its high, according to part of a company presentation made to authorities in Astana that was seen by Bloomberg.
Exxon has told Kazakhstan a potential $80 billion joint investment to expand the Kashagan field is contingent on resolving a long-running $150 billion dispute between the government and international companies and a $5 billion environmental fine, Bloomberg reported previously.
The proposed investment, in an equal joint venture with state-owned KazMunayGas National Co., would tap the undeveloped western part of the vast Kashagan reservoir, potentially producing as much as 600,000 barrels a day, Bloomberg reported. KazMunayGas contests Bloomberg’s reporting.
Exxon’s production estimates for Tengiz were based on no large investments being made to boost output — something that may not be the case in reality, people with knowledge of the matter said, asking not to be identified because the presentation was private.
Exxon declined to comment on the presentation. Kazakhstan’s Energy Ministry and Kashagan operator North Caspian Operating Co. didn’t comment.
Chevron Corp., the biggest shareholder in Tengiz, and Tengizchevroil LLC, the development’s operating company, said they are focused on maintaining “safe and reliable operations.” Both Chevron and TCO declined to comment on future production plans.
(Adds Chevron, TCO comment in last paragraph.)
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