Chevron said on Friday it had completed an expansion at the Tengiz oil field in Kazakhstan aimed at boosting output this year to about one million barrels a day, close to 1 percent of global supplies.
Chevron, which recently moved its headquarters from near San Francisco to Houston, continues to plow money into oil production, shrugging off concerns that demand will weaken as consumers turn to electric vehicles and cleaner energy.
“We know that global demand for oil will continue to grow,” Clay Neff, Chevron’s president of international exploration and production, said in an interview.
Tengiz, one of the most productive oil fields in the world, has been producing oil for about 30 years. However, crews operating in scrub plains where wild horses roam are set to increase production by about 40 percent. The first additional barrels are coming in now, Chevron said in a news release.
“It’s a very valuable oil field that will produce for decades to come,” said Mr. Nef.
The additional production will add oil to a global market that some analysts say will struggle to accommodate more production this year, potentially weighing on prices, which are now around $79 a barrel for Brent crude, the international benchmark. Kazakhstan is a member of the Saudi-led OPEC Plus oil cartel, which has pressured Kazakhstan to cut production.
At the same time, President Trump is urging operators in the United States as well as OPEC to pump more oil to lower prices.
Tengiz is critical to Chevron’s financial performance. Mr. Neff predicted that, assuming oil prices at $60 a barrel, it would bring Chevron $4 billion in 2025 and $5 billion in 2026 in free cash flow.
The oil field is operated by a joint venture owned 50% by Chevron. ExxonMobil, the American energy giant. Lukoil, a Russian company, and Kazakhstan’s KazMunayGas are also partners in the venture, known as Tengizchevroil.
The venture is also vital to Kazakhstan: it brought in 58 percent of state tax revenue paid by oil companies in 2023, according to a report by Kazenergy, a trade group.
Tengiz’s operation is difficult because the deadly hydrogen sulfide gas must be removed from the oil. However, the field’s massive production keeps costs down.
The bill for that expansion is likely to reach $49 billion, Chevron estimates. Construction, which included a new port on the Caspian Sea, has been ongoing for about a decade. At its peak, approximately 90,000 people participated.
During the expansion, Chevron faced risks including blowback from Russia’s war in Ukraine, disruption from the coronavirus pandemic and unrest in Kazakhstan in 2022 that prompted neighboring Russia to send troops.
Managing relations with Russia remains essential to the project. Equipment for the expansion was transported through Russia and most of the oil is sent by pipeline to the Russian port of Novorossiysk on the Black Sea for export, giving Moscow a potential chokehold.
