Chevron said Friday that it had completed an expansion at its Tengiz oil field in Kazakhstan intended to increase production this year to around one million barrels a day, approaching 1 percent of global supplies.
Chevron, which recently moved its headquarters from near San Francisco to Houston, continues to plow money into oil production, shrugging off concerns that demand will weaken as consumers shift to electric vehicles and cleaner energy.
“We know that the global demand for oil is going to continue to grow,” Clay Neff, president of Chevron international exploration and production, said in an interview.
Tengiz, one of the world’s most prolific oil fields, has been producing oil for around 30 years. Yet crews operating on the scrubby plains where wild horses roam are about to ramp up output by around 40 percent. The first additional barrels are now coming through, Chevron said in a news release.
“It’s quite a remarkable oil field and one that will produce for decades to come,” Mr. Neff said.
Tengiz is crucial for Chevron’s financial performance. Mr. Neff forecast that, assuming oil prices of $60 a barrel, it will generate Chevron $4 billion in 2025 and $5 billion in 2026 in free cash flow.
The oil field is operated by a joint venture that is 50 percent owned by Chevron. ExxonMobil, the American energy giant, and Lukoil, a Russian company, are also partners in the venture, known as Tengizchevroil.
The venture is also vital to Kazakhstan: It brought in 58 percent of government tax revenue paid by oil companies in 2023, according to a report by Kazenergy, a trade group.
Operating Tengiz is tricky because lethal hydrogen sulfide gas must be removed from the oil. Still, the field’s enormous output keeps costs low.
The bill for this expansion is likely to be as much as $49 billion, Chevron estimates. The construction, which included a new harbor on the Caspian Sea, has been going on for around a decade. At its peak, around 90,000 people were involved.
During the expansion, Chevron has navigated hazards including the blowback from Russia’s war in Ukraine, disruption from the coronavirus pandemic and unrest in Kazakhstan in 2022 that led to neighboring Russia sending in troops.
Managing relations with Russia remains essential for the project. Equipment for the expansion was shipped through Russia and most of oil is sent by pipeline to the Russian port of Novorossiysk on the Black Sea for export, giving Moscow a potential chokehold.
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