The terms of the contract signed by the Tengizchevroil LLP (TCO) consortium with the Kazakh authorities are considered fair by TCO's General Director Kevin Lyon, as reported by Interfax-Kazakhstan.
“As the General Director of TCO, I believe the terms of the contract are fair for the local market and the region. However, all decisions are made by our shareholders. I know that the agreement is fair; we not only pay taxes but also make contributions towards social projects. (…) I consider our contract and its terms to be fair for both investors and the Kazakh people,” said Kevin Lyon at a meeting of the Mazhilis Committee on Ecology and Natural Resources.
According to him, Kazakhstan gains international experience by collaborating with a global consortium, which, in turn, operates “safely” and brings not only investments but also “values” to the country. Later, commenting on recent statements from authorities about the intention to revise production sharing agreements with major subsoil users, Kevin Lyon noted that TCO is not linked to Kazakhstan by a production sharing agreement.
“TCO does not have a production sharing agreement; we operate under a contract concerning royalties and taxes. From the perspective of potential changes or expansions regarding Kazakhstan's share in the project, this is not something to discuss with TCO, as it is a matter for discussion between shareholders and the government,” commented Kevin Lyon.
Earlier, the Minister of Energy Almasadam Satkaliyev informed journalists that Kazakhstan will primarily begin negotiations with the Tengizchevroil consortium regarding a possible increase in the republic's share in the Tengiz field, as part of fulfilling the president's directive to extend and revise the terms of contracts with major subsoil users.
Tengizchevroil LLP is the operator of one of the largest oil and gas fields in Tengiz. The operator company consists of Chevron (50%), ExxonMobil (Kazakhstan Ventures Inc (25%), Kazakhstan through KazMunayGas (20%), and LUKOIL (5%).
Previously, President Kassym-Jomart Tokayev instructed the government to intensify negotiations regarding the extension of production sharing agreements on updated terms that are favorable for the country. Prime Minister Olzhas Bektanov stated that Kazakhstan plans to produce shale oil.
It should be noted that on January 24, 2025, under the Future Expansion Project, Tengizchevroil LLP (TCO) began the production of crude oil at the new third-generation plant (ZTP) at the Tengiz field. In the coming months, TCO plans to increase the total volume of crude oil production at Tengiz by an additional 12 million tons per year. Once all production facilities reach full capacity, the total crude oil production is expected to reach around 40 million tons per year.