Chevron (CVX) Delays $45B Tengiz Project Work Due to Coronavirus
Chevron Corporation-operated CVX Tengizchevroil (TCO) would postpone parts of its $45.2 billion expansion project in Kazakhstan by three-to-seven months due to coronavirus-led disruptions. This was announced last Friday by the country's energy minister.
The venture is run by Kazakhstan’s biggest oil producer Tengizchevroil, which is 50% owned by Chevron while the rest 25%, 20% and 5% are held by Exxon Mobil Corporation XOM, Kazakhstan's state energy firm KazMunayGas and Russia's Lukoil, respectively.
With 87% of the overall project now being completed, personnel remobilization on schedule, and the company's vaccination drive moving forward, the project is hitting significant milestones. While this will elevate expenses, prior savings will likely keep the entire project within the allocated budget.
Tengiz's Future Growth Project, which is expected to extend the Tengiz field’s annual oil output by 12 million tons, will be finished in November 2023 rather than April 2023.
Last year, the company had suspended all construction work on basic production due to the coronavirus pandemic and instead, decided to only conduct critical activity on the project. The critical work included building of pipelines in Kazakhstan or construction of equipment in South Korea, which will be utilized in the project.
In 1993, Chevron was awarded the rights to develop Tengiz. Per sources, the said oil field's reservoir is located 12,000 feet below the ground level, which makes it the world's deepest operating supergiant oil field.
About the Company
San Ramon, CA-based Chevron is one of the largest publicly-traded oil and gas companies in the world in terms of proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses. The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked players in the energy sector are Continental Resources, Inc. CLR and Magnolia Oil & Gas Corp MGY, each presently flaunting a Zacks Rank #1.
Continental Resources’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters while missing the same on one occasion.
Magnolia’s earnings beat the Zacks Consensus Estimate in all the last four quarters.
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