Tengiz Field

Tengiz Field

Location of the Tengiz Field on the coast of Caspian Sea

Country Kazakhstan
Offshore/onshore Onshore
Coordinates 46°9′10″N 53°23′0″E / 46.15278°N 53.38333°E / 46.15278; 53.38333Coordinates: 46°9′10″N 53°23′0″E / 46.15278°N 53.38333°E / 46.15278; 53.38333
Operator Tengizchevroil
Partners Chevron Corporation (50%), ExxonMobil (25%), KazMunayGas (20%)
Field history
Discovery 1979
Start of production 1993
Peak year 2010
Production
Current production of oil 450,000 barrels per day (~2.2×10^7 t/a)
Estimated oil in place 6,000 million barrels (~8.2×10^8 t)

Tengiz field (Tengiz is Turkic for "sea") is an oil field located in northwestern Kazakhstan's low-lying wetlands along the northeast shores of the Caspian Sea. It covers a 2,500 km2 (970 sq mi) project license area which also includes a smaller Korolev field as well as several exploratory prospects.

Sizewise, Tengiz reservoir is 19 km (12 mi) wide and 21 km (13 mi) long[1] Discovered in 1979, Tengiz oil field is one of the largest discoveries in recent history.[2] The city of Atyrau, 350 kilometres (220 mi) north of Tengiz, is the main transport hub of Tengiz oil. Many nations are involved in a large geopolitical competition to secure access to this source of oil.

Tengiz is operated by Tengizchevroil, a 40-year partnership planning to produce billions of barrels of oil from the field. The Tengizchevroil (TCO) consortium has developed the Tengiz field since its founding in April 1993. The partners in Tengizchevroil are Chevron[3] (50%), Exxon Mobil (25%), the Kazakhstan government through Kazakhstan Petroleum (20%) and Lukoil (5%)[4]

In 2001, the partners opened a US$2.7 billion, 1,505-kilometre (935 mi) Caspian Pipeline Consortium pipeline to export oil from Tengiz to the Black Sea port of Novorossiysk in Russia. The pipeline which was inaugurated in March 2001 (and loaded its first tanker in October 2001) carried 600,000 barrels per day (95,000 m3/d) with planned output of 700,000 barrels per day (110,000 m3/d) for 2010 and an eventual maximum output of 1.5 million barrels per day (240×10^3 m3/d).

Kashagan, which is located approximately 130 kilometres (81 mi) west of Tengiz and is world's largest discovery in the last 30 years, and Tengiz combined, compete with the 22 billion barrels (3.5×10^9 m3) of the US oil reserves.[5] Kazakhstan also considers building new export routes such as Trans-Caspian Oil Pipeline through Azerbaijan, Georgia, Turkey or through Iran to reduce dependence on Russia.[6]

History

Kazakhstan finalized the consortium agreement with Chevron in 1993.[7] In 1997, Lukoil purchased 5% in the Tengiz project from Chevron,[8] and in 2000, Chevron built up its interest in the project to 50% by acquiring additional shares[9] from Kazakhstan.[10] In 2003, Fluor was awarded the rights[9] to develop the Second Generation Plant (SGP) and Sour Gas Injection (SGI) project, which were expected to double production.[11] In 2004, the Tengiz Consortium raised $1.1 billion in senior secured bonds to finance these two projects. These two projects were expected to finish in 2006. [12] The SGP and SGI expansion projects (worth over $6.9 billion) were completed in the second part of 2008.[11] In 2012, TengizChevroil began a new project, called the Future Growth Project (FGP), whose aim is to continue to increase the field's production.[13] In 2014, Chevron and its partners, KazMunaiGas, ExxonMobil and Lukoil began the process of selecting engineering companies to work on the engineering, procurement and construction (EPC) contract for the Future Growth Project, which will further expand the TCO oil field.[14]

Reserves and production

Estimated at up to 25 billion barrels (4.0×10^9 m3) of oil originally in place, Tengiz is the sixth largest oil field in the world; recoverable crude oil reserves from Tengiz and Korolev fields combined have been estimated at 6 to 9 billion barrels (950×10^6 to 1,430×10^6 m3). Korolev field alone holds 1.5 billion barrels (240×10^6 m3) of oil making it one-sixth the size of Tengiz.[1] Like many other oil fields, the Tengiz also contains large reserves of natural gas. The field is one of the world's largest oil fields, rivaling the Gulf of Mexico in reserves of oil.[15]

Since the oil from Tengiz contains a high amount of sulfur (up to 17%), an estimated 6 million tons of sulfur byproduct were stored in the form of large sulfur blocks as of December 2002. At the time, about 4,000 tonnes a day was being added.[16] On 3 October 2007, the Kazakh environment ministry was reported to be considering imposing fines against TCO for alleged breaches in the way the sulfur is stored.[17]

In 2002, TCO produced 285,000 barrels per day (45,300 m3/d), or one third of Kazakhstan's daily production. In January 2003, after contentious negotiations with the government of Kazakhstan, the TCO consortium members initiated a $3 billion expansion project designed to boost production to approximately 450,000 barrels per day (72,000 m3/d) by 2006. In September 2008, Chevron Corporation announced that the major expansion of Tengiz field was completed and it would boost the production capacity to 540,000 barrels per day (86,000 m3/d).[18] In 2012 Chevron announced the field will see its total daily production increase by 250,000-300,000 barrels,[19] bringing production above 500,000 barrels per day.

An area of major geopolitical competition involves the routing of oil out of this oil field. Oil from the Tengiz field is primarily routed to the Russian Black Sea port of Novorossiysk through the Caspian Pipeline Consortium (CPC) project. The Baku–Tbilisi–Ceyhan pipeline is an alternative pipeline developed by U.S. and UK interests originating in the Southern Caspian which is the principal export route for crude from Azerbaijan and bypasses dependence on the Russian pipeline. In addition, Total S.A. is interested in developing a pipeline south through Iran, which is theoretically the cheapest route[20] due to the geopolitical climate involving Iran, however, the United States does not favor this route.

Environmental concerns

The oil from Tengiz field comes out of the wells hot and at a very high pressure, believed to be the highest in the world. It also contains large proportion of gas which is rich in the compound hydrogen sulfide yielding poisonous sulfur. A 1985 explosion in which one man was killed caused a 200-metre (660 ft)-high column of fire visible from 140 kilometres (87 mi). The deadly gas made it impossible for Soviet firefighters to quickly extinguish the fire. The well burned for a period of one year and was finally capped[2]

The government of the Kazakhstan imposed stricter guidelines for handling the sulfur. In 2006, Kazakh government threatened TengizChevroil with imposing fines. In 2007, the government imposed a $609 million (74.4 billion tenge) fine on TengizChevroil. The violations included a slow progress in dealing with vast sulfur stocks at Tengiz. The company had reportedly been fined $71 million in 2003 for open air sulfur storage as well, which was then reduced to $7 million on an appeal.[21] According to the Environmental Protection Ministry, over 10 million tonnes of sulfur was accumulated near Tengiz oil field as a by-product of crude oil production.

Government had also set a requirement to relocate the village of Sarykamys which had 3,500 residents to new homes in the vicinity of Atyrau. The relocation program was funded by TengizChevroil and was done in 2004-2006. It cost the company $73 million.[22]

In his book Poor People, published in 2007, William T. Vollmann dedicates a significant amount of his attention to the native peoples living in Sarykamys and Atyrau and the effects of TengizChevroil's presence in these towns. Vollmann's account suggests that serious and widespread health risks were imposed upon the people of Sarykamys. Vollmann also suggests that in the corporation's efforts to displace the natives, many were not compensated fairly, so that upon being forced to move from their existing homes, they were unable to find or afford comparable housing in a new town.[23]

Geology

The sedimentary section of the pre-Caspian basin varies between 5 km to 24 km and is dominated by the Permian Kungurian salt, which is overlain by the later (post-salt) deposits of Upper Permian, Mesozoic and Cenozoic all deformed by salt tectonics and earlier (pre-salt) Paleozoic and upper Proterozoic carbonates and terrigenous sediments.[24]:102 Reflection seismology in 1975 revealed the Karaton tectonic uplift, which was 400 km2 in area and 1 km in relief, at a depth of 4 km.[24]:104 An exploratory well was drilled in 1979, discovering "significant oil flow" from the middle Carboniferous carbonates overlain by Lower Permian clays and the massive Permian salt.[24]:106

Stratigraphy starts with the Upper Devonian Famennian Stage consisting of homogeneous biogenic limestone and some thin dolomite interbedding, followed by Lower Carboniferous deposits consisting of Tournaisian, Visean and Namurian Stage limestones.[24]:108–109 Next comes the Middle Carboniferous Bashkirian Stage limestones, and then the Lower Permian Artinksian Stage argillaceous sediments.[24]:108–109 The carbonate buildup is up to 4 km thick and form an angular unconformity to the overlying Permian sediments.[24]:110

In pop culture

The Tengiz oil field was mentioned in the film Syriana (2005) starring George Clooney.

See also

References

  1. 1 2 "About TCO". Tengizchevroil.com. Retrieved 2015-06-01.
  2. 1 2 Christopher Pala (2001-10-23). "Kazakhstan Field's Riches Come With a Price". 82 (715). The St. Petersburg Times. Archived from the original on 2013-12-29. Retrieved 2009-10-12.
  3. ↑ "Chevron to spend $6-$8 bln on new Tengiz project". Reuters. 2012-02-15. Retrieved 2015-06-01.
  4. ↑ "Tengiz Oilfield". Hydrocarbons-technology.com. Retrieved 2015-06-01.
  5. ↑ Johnston, Daniel (2003). International Exploration. Economics, Risk, and Contract Analysis. 1st ed. PennWell Corporation. p. 199. ISBN 0-87814-887-6.
  6. ↑ Lucky Lopez (2001-03-27). "Oil Begins Flowing Through Kazakh Pipeline". The New York Times. Retrieved 2009-12-10.
  7. ↑ "Tengizchevroil Fact Sheet 1H 2015". Petroleum Kazakhstan Analytical Journal. Retrieved 14 November 2015.
  8. ↑ "Russia's Lukoil Buys 5% of Chevron Project". Los Angeles Times. Retrieved 14 November 2015.
  9. 1 2 "Tengiz Oil Field". A Barrel Full. Retrieved 14 November 2015.
  10. ↑ "Horizons of Kazakhstan's Oil Production". Caspian Energy. Archived from the original on 17 November 2015. Retrieved 14 November 2015.
  11. 1 2 "TengizChevroil SGI/SGP Onshore Oil and Gas Projects - Project Management & Engineering". Fluor. Retrieved 14 November 2015.
  12. ↑ "Fitch Assigns Tengizchevroil Expected 'BBB-' Rating". Financial CBonds Information. Retrieved 14 November 2015.
  13. ↑ "Tengizchevroil at the Start of the Future Growth Project". Petroleum Kazakhstan Analytical Journal. Retrieved 14 November 2015.
  14. ↑ "Chevron and KMG align offers on Kazakhstan Future Growth Project". 2B1st Consulting. Retrieved 14 November 2015.
  15. ↑
  16. ↑ Brown, Paul (2002-12-04). "Byproduct that blights Caspian life". The Guardian. London. Retrieved 2010-05-25.
  17. ↑
  18. ↑ "Chevron Achieves Full Production from Tengiz Expansion Projects". OilVoice. 2008-09-25. Retrieved 2010-10-24.
  19. ↑ "2011 Year in Review". Tengizchevroil. 2012-02-13. Archived from the original on 2012-07-07. Retrieved 2012-10-02.
  20. ↑ Yenikeyeff, Shamil (November 2008). "Kazakhstan's Gas: Export Markets and Export Routes" (PDF). Oxford Institute for Energy Studies: 18. Retrieved 2011-11-17.
  21. ↑ "Chevron hit with $609m Tengiz fine". Upstream Online. NHST Media Group. 2007-10-03. Retrieved 2009-12-10.
  22. ↑ "Environmental Charges Unlikely to Derail Kazakstan's Chevron Contract". Environment News Service. 2006-08-23. Retrieved 2009-12-10.
  23. ↑ Vollmann, William T. Poor People. Ecco, 2007. pp. 173-196.
  24. 1 2 3 4 5 6 Lisovsky, N.N., Gogonenkov, G.N., and Petzoukha, Y.A., 1992, The Tengiz Oil Field in the Pre-Caspian Basin of Kazakhstan (Former USSR) - Supergiant of the 1980s, inGiant Oil and Gas Fields of the Decade, 1978-1988, AAPG Memoir 54, Halbouty, M.T., editor, Tulsa: American Association of Petroleum Geologists, ISBN 0891813330
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