Oil and gas companies are beginning to loosen grips on their wallets as another high-dollar project has been cleared for development.

Chevron Corp. (NYSE: CVX) affiliate Tengizchevroil, a joint venture with ExxonMobil Corp. (NYSE: XOM), KazMunayGas and LukArco, has decided to proceed with its $36.8 billion future growth and wellhead pressure management project that aims to increase production at the Tengiz oil field in Kazakhstan by 260,000 barrels per day (bbl/d) to 850,000 bbl/d. The project will involve reinjecting sour gas into the Tengiz reservoir—using the same technology used in existing Tengiz operations—for EOR.

First oil is expected in 2022.

The final investment decision for the Tengiz expansion is the latest of several projects in recent weeks to receive financial commitments. Steps forward are being taken as commodity prices continue rebounding, with occasional setbacks, from lows earlier this year in the upper $20s/bbl. Companies have shelved expensive projects, tweaked development plans, lowered spending and embraced technology to drive down costs as they await improved market conditions and higher profits.

For Chevron, the time is right.

“It has undergone extensive engineering and construction planning reviews and is well-timed to take advantage of lower costs of oil industry goods and services,” Jay Johnson, executive vice president of upstream operations for Chevron, said of the Tengiz expansion in a prepared statement.

Chevron has called the project a major brownfield opportunity. As reservoir pressures decline at the plant, Chevron said wellhead pressure management would provide additional wells and pressure boosting facilities to maintain existing production, while the future growth project would add production and injection trains to increase production.

The project, which is actually two projects being carried out simultaneously, includes new crude oil production wells, a gathering system plant for oil and gas processing, and a third-generation injection plant for natural gas re-injection that contains hydrogen sulfide as well as facilities to lower the flowing well head pressure and boost pressure to the six existing trains and delivery facilities, according to Tengizchevroil.

At $27.1 billion, the bulk of the project’s costs will go toward facilities, while $3.5 billion is being set aside for wells and $6.2 billion for contingency and escalation.

Plans are to use existing oil export routes, including the 935-mile Caspian Pipeline Consortium oil pipeline that connects Tengiz with a terminal on the coast of the Russian Black Sea.

The project is expected to increase Tengizchevroil's total production to about 39 million tonnes of oil per year and create about 20,000 jobs during peak construction.

“The creation of jobs, the purchase of products and services and the ‘multiplier effect’ throughout Kazakhstan’s economy are significant,” said Tengizchevroil Deputy General Director Anuarbek Jakiyev, “FGP-WPMP will leave a legacy of new capabilities for our country’s future—in engineering, high-tech equipment servicing, project management, construction and fabrication.”

Kanat Bozumbayev, the energy minister for the Kazakhstan, added: “This decision made by major international companies reaffirms that the Republic of Kazakhstan is a country with [a] favorable business climate where long-term investments can be made with confidence.”

The final investment decision for the project was announced about a week after Woodside Energy Ltd. and partner Mitsui E&P Australia said they agreed to spend $1.9 billion to develop the Greater Enfield reserves offshore Western Australia.

In June, BP Plc (NYSE: BP) and partner Egyptian Natural Gas Holding Co. sanctioned the Atoll gas field development in the Mediterranean Sea. In addition, BP announced July 1 that the final investment decision was approved for the Tangguh LNG expansion project in Indonesia.

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Velda Addison can be reached at vaddison@hartenergy.com.