Eric Watkins
Senior Correspondent
LOS ANGELES, Apr. 18 -- Chevron Corp. affiliate Tengizchevroil LLP (TCO) said it will challenge a $307 million fine levied by Kazakhstan allegedly for violating the country's environmental law at its main production site. Tengizchevroil is a joint venture of Chevron 50%, KazMunaiGas 20%, ExxonMobil Kazakhstan Ventures Inc. 25%, and LukArco 5%.
The fine echoes an earlier one levied in October 2007, when Kazakh authorities imposed a $609 million fine on the TCO consortium for violating national environmental legislation (OGJ, Oct. 15, 2007, p. 30). The fine stemmed from a set of complaints filed against the consortium between 2003 and 2006 for the illegal storage of uncondensed sulfur.
The TCO challenge followed shortly after an Apr. 14 meeting between Kazakh President Nursultan Nazarbayev and Chevron Chief Executive Officer David O'Reilly to discus plans to expand TCO's development of offshore Tengiz oil field in the Caspian Sea.
Referring to the environmental aspects of the project, O'Reilly said he discussed the issue with Nazarbayev and offered to implement a "project on storing and utilizing sulfur."
Meanwhile, O'Reilly told reporters that the first stage of TCO's Tengiz project was completed, and that TCO was able to increase oil production by 4 million tonnes, to reach an output of 18.7 million tonnes/year of oil by yearend.
O'Reilly said TCO is seeking to progress to the second stage of the project, with projected production to reach 24 million tonnes/year of oil.
In January, Chevron said TCO had started up new facilities as part of the first phase of its expansion at Tengiz field in Kazakhstan (OGJ Online, Jan. 30, 2008). It said an initial expansion of 90,000 b/d brought TCO's current capacity to a total of some 400,000 b/d, and that a further increase to 540,000 b/d was expected during this year's second half.
Contact Eric Watkins at [email protected].
