Megaproject problems: Chevron faces US$10 billion cost overrun and delays at Kazakhstan’s Tengiz expansion
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Table of contents
- Executive summary
-
What has gone wrong?
- Costs – up to US$10 billion of overruns
- Schedule – FGP start-up pushed back to 2023
-
FGP-WPMP returns take another hit
- A sub-10% rate of return, even if world-class cash flow awaits
- Capital expenditure will decline from 2018-19 peak, but risks persist
- Long-term production outlook is largely unchanged
-
What could boost the FGP-WPMP outlook?
- A future contract extension grows ever more vital
- Sustaining operational reliability could unlock more barrels
- Some project delivery successes, amid the disappointing news
- Drilling programme has exceeded expectations
- Site productivity has ramped up in 2018-19
- Global logistics system has worked well
-
Another project delivery misstep for Chevron and the regional industry
- History repeating, despite lessons learned
- Strategic choices to make in Chevron’s portfolio
- TCO remains a top-tier asset for all partners
- The latest reality check for Kazakhstan’s competitiveness
- Kazakhstan’s other main operators are adapting their plans
Tables and charts
This report includes 9 images and tables including:
- Tengizchevroil expansion (FGP-WPMP) cost estimate – then and now
- FGP-WPMP project economics (base case)
- FGP-WPMP IRR – sensitivity to long-term oil price
- Tengizchevroil expansion (FGP-WPMP) incremental cash flow (gross basis)
- Tengizchevroil expansion (FGP-WPMP) capital expenditure by year
- Tengizchevroil oil production
- Chevron – top upstream assets/plays by NPV10
- ExxonMobil – top upstream assets/plays by NPV10
- Caspian and Central Asia – major capital project track record
What's included
This report contains:
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