TBY talks to Tim Miller, General Director of Tengizchevroil, on the oil and gas sector in Kazakhstan and its role as an energy provider.
TBY Tengizchevroil (TCO) is Kazakhstan’s biggest crude oil producer. How would you describe TCO’s growth in Kazakhstan and its contribution to the country’s full energy potential?
TIM MILLER We are very proud of having increased production from approximately 1 million to almost 26 million tons per year since our inception in 1993. What has contributed to our growth and where we believe we contribute the most to Kazakhstan’s full potential is simple: investment in people and technology.
What are TCO’s plans for continued growth?
TCO is dedicated to increasing production, jobs, and opportunities for businesses to the benefit of Kazakhstan through continued growth of the Tengiz field. With the success of our recent expansion, we are studying further similar growth opportunities for Tengiz. We have proposed an expansion opportunity based on the successes of the last expansion that could add further value to Kazakhstan and its citizens through jobs, business opportunities, revenues to Kazakhstan, and reserves growth. The project could move into detailed design and construction after receiving the necessary approvals from the appropriate regulatory authorities and TCO’s partner companies.
A good example of how major projects such as expansions impact the Kazakhstani economy is our most recent, the Second Generation Plant expansion. Throughout that expansion, TCO invested about $2 billion in Kazakhstani goods and services with more than 200 companies and utilized tens of thousands of workers.
How should new transport links be designed to improve Kazakhstan’s ability to meet the increasing demand from neighboring geographies?
As a responsible operator, we maintain a diverse portfolio of export capacity and have always encouraged the creation of new routes or expansions to existing ones.
How do you see the future of Kazakhstan as an energy provider to Western and Eastern markets?
Kazakhstan is uniquely situated between several growing regions that will need vast amounts of different energy sources to support the needs of their populations and to progress their growth plans. In addition, Kazakhstan continues to demonstrate strong growth, which will surely mean increased domestic energy needs. This increased demand, of course, is considered in our plans for continued growth and world-class reliability.
What improvements have you observed in the oil and gas sector with regard to rules and regulations? Where do you see room for further progress?
The leaders of Kazakhstan have a long track record of being committed to ensuring a stable and attractive investment climate. Recently, we have been pleased with increased transparency and dialogue with stakeholders in the formation of laws and regulations that are based on the long-term vision of being a good place for domestic and foreign investors.
What is your outlook for 2011 and beyond?
We are enjoying a very strong year in safety, environmental protection, and production. One of the clearest indicators of our production and financial success is what we are able to deliver back to Kazakhstan, thanks to strong crude oil prices. As of June 2011, TCO has made direct financial payments of $52.4 billion to Kazakhstani entities, including profit distributions to Kazakhstani shareholders, and taxes and royalties paid to the government. In the first half of 2011, direct payments to Kazakhstan totaled $7 billion, compared to $9.6 billion in total payments for 2010.
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