Tengiz First Phase Launched

Chevron affiliate Tengizchevroil LLP has launched the first phase of expansion at the Tengiz oil field in Kazakhstan.

The initial expansion of 90,000 barrels per day will raise Tengizchevroil's capacity to around 400,000 bpd, Chevron says.

The news comes as the Kazakh Government announced it may impose a duty tax on exports of crude and oil products from 2009, a step which could alarm Western oil companies.

As most big oil producers in Kazakhstan have production sharing agreements (PSA) with fixed taxation schemes, they are likely to be exempt from the duty, the government says.

The government has also said the new law will not affect the Kashagan oil field – the world's biggest oil discovery in 30 years - where production has now been pushed back to 2011.

The government will hold "individual" discussions with PSA companies to come up with the final list of those eligible, writes Reuters.

By Ozge Ibrahim