Chevron is prepared to spend $40 billion dollars to develop the Tengiz oil field in Kazakhstan, the most expensive oil industry project in the world for 2016. You can read the story on Fuel Fix. I hope they don't use Gorgon as a model. I have already been laid off by Chevron, so I don't care what they do at this point. I didn't know that they had all of this cash and financing available. Or, maybe they don't. Remember, you are are always a valued employee until you are not.
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2ytx, A negative interest rate means the central bank and perhaps private banks will charge negative interest: instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank. Imagine a bank that pays negative interest. In this upside-down world, borrowers get paid and savers penalized. Crazy as it sounds, several of Europe's central banks cut key interest rates below zero in 2014, and now Japan has followed.
I'm with ya @Icdmbey-2aob. I bailed as well but haven't exercised my lump sum withdrawal yet as I'm hoping things hold or get a bit lower (sustained) before Nov election. Also hoping for a little bit of optimism in the O&G industry before same so I can unload the balance of my CVX stock. Question: How do interest rates go negative (outside of Government continuing to print worthless money)? Isn't zero interest kind of like absolute zero temperature?
Oil is cheap and price will not be going over current levels. Expect $40-50 range for many years to come. I'm glad I retired, got my 1 year severance "bonus" and took my pension as an annuity when interest rates were a bit higher. Interest rates are heading down and will stay down or lower if Clinton wins in November. More social programs, more debt borrowing, just means interest rates continue the low path they're on. God help us if the Fed plays with the idea of negative interest rates.
Fresh off the press. Tengiz expansion (FGP/WPMP) FID approved. Varying CAPEX reported, but give or take a few billion USD between $37-40B and operational by 2022. One thing obviously omitted is how many Bs have already been invested and whether they are part of total cost or considered sunk cost.
Mark it down to see how close either come to becoming a reality!
Ironic that in today's news, USA is reported to now have more oil reserves than Saudia Arabia and Russia? It will be interesting to see how they play into the world market over the next decade.
ATTENTION: Troll Alert @Icdmbey-2sar.
@Icdmbey-1vps, You are 100% correct, Timing will be perfect to replace your worthless piece of deadwood A$$ with some fresh blood. Heads need to roll and yours is one of them.
Thè money for this has to come from somewhere. UBS (bank) expects Chevron to raise dividend by 2% to $1.09/share in 4th quarter this year. I will be very surprised if there is not another significant layoff announcement this Fall.
Hurry XOM! Get in there and create some sense of reason. Start by demanding the Project Director control (aka replace PB immediately). CVX's profitability (and possibly existance) needs your help! Don't stop at FGP level. Push some fresh blood into the Base Operations too!
Timing will be perfect for the Fall CVX ESP!
XOM will not FID TCO until they are comfortable with project team composition. They learned their lesson on Gorgon and Kashagen, never to trust the operator especially Chevron and ENI. ExxonMobil has large numbers of highly qualified project people finishing up on Hebron and PNG. They are demanding key positions in TCO, and will delay FID until the project team is right.
As a TCO partner, XOM will also have a big say in FID. They just announced a huge discovery offshore in South America w/ an estimated $18B price tag.
They have a balance sheet that will fund both where CVX is busy selling itself off to pay dividends.
Too bad XOM wouldn't be allowed to just buy CVX and take reasonable assets into profitable business!
I figure they could scrap everything done to date on FGP and still get a finished project in Tengiz operational before current plan gets implemented.
Excellent post and analysis, @dqw. I especially appreciate your acronym for CPDEP (Chevron's Process to Delay Every Project). - That's Pure Gold and another post worthy of the Chevron Corp Layoff website Hall of Fame.
A key FUBAR sold into the engineering design is "modularization" of the main plants (just like Gorgon, Wheatstone, EGTL and to a lesser extent ALNG). Tengiz is a notoriously difficult place to perform efficient work due to the weather. Hence, build off site and transport to site. Seems logical ... right?
Outside the fact that all these other projects have NOT been poster children for construction successes, they in fact are all located next to blue water oceans. The Tengiz challenge is modules will be fabricated in Asia, transported half way around the world into the Black Sea, up the Russian inland waterway (locks with limited capacity) and down the (sturgeon sensitive) Volga River during a limited summer window into the Caspian and then across a special haul road constructed on a soft dry sea bed, only to then be restacked/connected at site in a sequence that if one module is delayed, the whole sequence goes to hell in a hand basket.
Any decent Project professional/businessman knows to not put all the eggs in one basket (or at least have a second basket). Obviously, PRC's experts missed that while consumed in their own brand of logic called CPDEP (Chevron's Process to Delay Every Project). The lot of them should be run off!
Exxon-Mobil is starting to demand embedding of some of their folks into the project and hopefully they will yield some influence on the execution, but the design damage is already done.
Don't plan on seeing FID this year on that $40B...which will be $50-60B when the final tab is added up.
Watson will need to find something else to sell-off first. Who knows...maybe Gorgon, Wheatstone? Sorry. I forgot that they are near worthless (outside the gas reserves) without working process plants.