Kazakhstan and the ChevronTexaco-led consortium, Tengizchevroil, have settled their financial dispute over the $3 billion expansion project at the Tengiz oil field in Kazakhstan. Operations at the Tengiz field were suspended last November after the consortium failed to reach a compromise with the government on how to fund its future development. Energy Minister Vladimir Shkolnik said last month that a compromise had been reached, but the investors would not comment on this at the time and it was never confirmed. However, news the dispute was over came after a meeting of TCO's Partnership Council and the Kazakh government which ended in the new capital Astana late on Friday. "Tengizchevroil is pleased to announce that its partners have approved funding for detailed engineering and construction of the Second Generation Project (SGP) and Sour Gas Injection (SGI) projects," TCO said in a press release.
"The two projects are expected to be completed in mid-2006 and will provide significant benefits to the Republic of Kazakhstan during and after their execution." The SGP/SGI project would yield $810 million to the state budget in 2003-05, above current tax payments.
Partners are ChevronTexaco with 50%; KazMunayGaz with 20%; ExxonMobil with 25% and LUKArco with 5%.