Chevron Calm, Despite Many Tengiz Problems

DENVER, Colorado -- Chevron Corp. is optimistic that it will resolve problems hampering its $20 billion oilfield project in Kazakhstan, including establishment of an export pipeline, a company executive said.The Tengiz project produced 65,000 barrels a day for several days last week, and is projected to produce up to 750,000 barrels a day by 2010, said Richard Matzke, the president of Chevron Overseas Petroleum Inc. "A lot of things have happened since we started work at Tengiz 15 months ago, including some things we didn't plan on," Matzke told the American Association of Petroleum Geologists convention Monday. "But the project is now a reality -- and it is in our hands to make it a success." Chevron and Kazakhstan signed a 50-50 joint venture in April 1993 to develop the Tengiz Field, which is believed to hold 9 billion recoverable barrels of oil. About one-third of the joint venture's $1.5 billion development budget has been invested. Last month, Chevron curtailed its production in the project after negotiations stalled on establishing an export pipeline. Matzke admitted the project had "cost overruns and that production has been down by half because we can't export as much as we'd like." He added: "In retrospect, we didn't do a very good job of planning the pipeline before we started development."Matzke said however more than half of its cash payment to Kazakhstan is a lump-sum payment after the export system is in place.