Chevron had already flagged the likelihood of delay to the 'Future Growth Project' (FGP) and 'Wellhead Pressure Management Project' (WPMP), which have involved deploying tens of thousands of workers to the remote site on the eastern shores of the Caspian Sea, and a major logistical exercise to ship modules through the Russian canal system.
The Tengizchevroil (TCO) consortium, in which Chevron holds a 50% stake alongside smaller stakes for ExxonMobil, Lukoil, and KazMunaiGaz, has contended with a significant COVID-19 outbreak among workers.
Jay Johnson, executive upstream VP said:
- At FGP-WPMP overall progress is at 84%, with field construction 69% complete
- We've recently reviewed our cost and schedule targets
- At this point, the net schedule extension from the pandemic is expected to be roughly a quarter for WPMP and 2 quarters for FGP
- Our cost target remains $45.2 billion as cost reduction efforts and favorable exchange rates offset an estimated $1.9 billion of incremental costs associated with COVID
- The COVID costs include mitigation efforts, de-mobilization and remobilization costs, as well as the expected schedule extension
- Although the total project cost target is unchanged, we have increased the project contingency to $1.9 billion, to recognize the schedule uncertainty associated with the virus and its variants
- The project is currently at peak workforce and our primary focus is to mitigate the impact of the virus with vaccinations, testing, and isolation protocols to enable workforce productivity
Tengiz is generally the largest contributor of the light CPC crude blend loaded at Novorossiysk on Russia's Black Sea coast, with the Kashagan field now generally the second-largest contributor.