Fitch comments Tengizchevroil expansion

The International Ratings Agency Fitch Ratings expects that the Tengizchevroil (TCO) expansion will result in a lower dividend stream to the Kazakh state-owned National Company KazMunaiGas, which owns a 20% stake in TCO, over the medium term.

“We have already incorporated this scenario in our rating case for NC KMG. Although we view the TCO expansion as positive for Kazakhstan's oil production in the longer term, it will slow down NC KMG's deleveraging," Trend cited Fitch as saying.

The decision to approve the TCO expansion is a good news for the global oil sector, which has been plagued by low oil prices over the past two years that resulted in massive capital investment cuts in exploration and production, estimated at as much as $1 trillion globally between 2015 and 2020, said Fitch experts.

The Wellhead Pressure Management Project (FGP-WPMP) is currently estimated to cost $36.8 billion, which includes contingency and escalation.