In May, Chevron Corporation announced to go ahead with $36.8 billion expansion of Tengiz oil project located in Kazakhstan as oil prices showed early signs of recovery and touched $50 per barrel mark.
On the other hand, the consortium led by Eni Spa, which includes partners such as Total SA (ADR) (NYSE:TOT), Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Exxon Mobil Corporation, and China National Petroleum is also developing an oil field in Kazakhstan named as Kashagan.
According to the Central Asian country’s energy minister, Bozumbayev Kanat Aldabergenovich, the work at the oilfield is going at the right track and some crude has already been processed and put into storage. He also stated that his country will not reduce its oil production, even if all other OPEC members agree on it.
Almost four wells are already producing oil with a total oil output of 90,000 barrels of oil equivalent per day (BOEPD). The oilfield formerly known as Kashagan has taken around 16 years and more than $50 billion to bring it to the verge of producing oil. However, it could take another 10 years to bring it to its full capacity.
Initially, the oilfield is expected to produce 75,000 BOEPD, but will increase to 150,000-180,000 BOEPD in November and December.
In 2015, energy companies across the globe slashed more than $1 trillion in the form of capital spending, in a bid to survive the downturn that saw oil price to plunge from $110 per barrel to below $30 per barrel. The collapse in oil price has also reduce prices of rigs required for drilling and oilfield services, due to which some big oil companies are taking advantage of it.
There is little doubt that there are signs that the prolong freeze in capital spending is beginning to thaw. Several other big oil companies including BP, Chevron, and Exxon has already started to invest. In June, BP gave green signal to multi-billion dollar gas export expansion complex.