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Chevron ( CVX ) expected full capacity of Tengiz expansion by June

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Output at Tengiz jumped to 900,000 bpd in early February -

data

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Kazakhstan frequently overproduces under OPEC+ deal

Feb 7 (Reuters) - Chevron ( CVX ) is speeding up its

expansion of Kazakhstan's Tengiz oilfield, two sources familiar

with the plans told Reuters, raising its output to around 1% of

global crude supply.

Chevron ( CVX ) said in January it had begun a $48 billion expansion

of Tengiz, which is one of the world's deepest and most complex

fields due to high sulphur levels and harsh weather conditions.

Enlargement of the Kazakh oilfield has suffered delays and

huge cost overruns since it began in 2012.

Clay Neff, Chevron's ( CVX ) head of international exploration and

production, told Reuters last month that the Tengiz expansion

was expected to reach full capacity of 260,000 barrels per day

(bpd) by June, lifting its overall production to around 1

million barrels of oil equivalent per day.

A source familiar with the plans said on Friday that Chevron ( CVX )

is likely to complete the ramp-up of the expansion by the end of

February, four months earlier than expected.

Kazakhstan has persistently exceeded its output quota of

1.468 million bpd under the production-curbing deal struck by

the Organization of the Petroleum Exporting Countries and allies

such as Russia - together known as OPEC+.

The speedy expansion of the field will likely complicate

efforts to restrain Kazakhstan's overall oil output in line with

the quotas agreed by the OPEC+ group of leading producers.

The Central Asian country plans to boost its oil and gas

condensate production this year to 96.2 million metric tons

(around 2 million bpd) from 87.56 million tons in 2024.

Kazakhstan's energy ministry said on Tuesday that the

country will do whatever is necessary this and next year to

fulfil its obligations under the OPEC+ agreement and compensate

for oil overproduction in 2024.

CPC

Oil from the field is shipped via the Caspian Pipeline

Consortium (CPC) pipeline for export from a terminal near

Russia's Black Sea's port of Novorossiisk.

Another source, familiar with the data, said oil production

at Tengiz has already reached 900,000 bpd, up from 606,000 bpd

on average in 2024.

"It is ahead of schedule it seems," a trader said.

Chevron ( CVX ) has a 50% stake in the Tengizchevroil joint venture,

which it operates. Exxon Mobil ( XOM ) holds 25%, Kazakh oil

firm KazMunayGas 20% and Russia's Lukoil 5%.

Tengizchevroil, which did not immediately respond to a

request for comment, is expected to generate $4 billion of free

cash flow in 2025 and $5 billion next year at an average Brent

price of $60 a barrel.

The oil currently trades at around $75 per barrel.