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How Investment in TCO Is Powering Chevron's Next Wave of Cash Growth
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Key Takeaways
Chevron's Tengiz expansion added about 260,000 barrels/day, lifting capacity to roughly 1M BOE/d.
CVX expects TCO to support production growth in 2025 and 2026 and free cash flow through 2030.
Chevron received a $1B TCO loan repayment in Q1 2026 and expects more repayments this year.
Chevron Corporation’s(CVX - Free Report) 50% stake in Tengizchevroil (TCO), which operates the giant Tengiz and Korolev oil fields in Kazakhstan, is one of the company’s most valuable international upstream investments. TCO is a key contributor to Chevron’s reserve base, with Kazakhstan accounting for nearly 11% of the company’s proved reserves. The asset recently entered a new growth phase following the completion of the Future Growth Project (FGP) and Wellhead Pressure Management Project in 2025.
The FGP increased Tengiz crude production capacity by approximately 260,000 barrels per day, lifting total gross production capacity to around 1 million barrels of oil equivalent per day (BOE/d). This expansion has become a major driver of Chevron’s production growth, contributing significantly to the company’s 2025 output increase and expected growth in 2026. Management views TCO as a cornerstone asset supporting long-term production and free cash flow growth through 2030.
TCO is also transitioning from a capital-intensive project to a cash-generating asset. Chevron has provided substantial financing for its expansion and received a $1 billion loan repayment in the first quarter of 2026. It also expects additional repayments during the year, further boosting cash flow.
Although higher depreciation expenses and weaker commodity realizations temporarily pressured earnings in 2025, TCO’s long-term value proposition remains strong. The project provides large-scale, low-cost production growth, high-margin barrels, rising free cash flow and meaningful capital returns. As a result, TCO is expected to be one of Chevron’s largest contributors to cash generation and shareholder value creation over the remainder of the decade.
Other Oil Majors Operating in Kazakhstan
Exxon Mobil Corporation (XOM - Free Report) is a major international investor in Kazakhstan’s energy industry, playing a key role in the development of the country’s vast oil and gas resources. Through its local subsidiaries, including ExxonMobil Kazakhstan Inc., the company collaborates closely with the Kazakh government and national oil company, KazMunayGas, to advance exploration, production and transportation activities. A cornerstone of ExxonMobil’s presence in the country is its 25% stake in the TCO joint venture, which operates the world-class Tengiz oil field located along the northeastern coast of the Caspian Sea, one of Kazakhstan’s most significant energy assets.
TotalEnergies SE (TTE - Free Report) has established a strong presence in Kazakhstan through a balanced energy strategy that combines large-scale oil and gas operations with growing investments in renewable energy. The company is a key contributor to the nation’s hydrocarbon production and supports Kazakhstan’s position as a major global energy supplier. TotalEnergies owns a 16.81% interest in the North Caspian Project’s Kashagan field, one of the world’s largest offshore oil developments in the Caspian Sea. At the same time, TTE is advancing Kazakhstan’s energy transition through the Mirny Project, a major renewable energy initiative aligned with the country’s 2060 net-zero emissions target.
CVX’s Price Performance, Valuation & Estimates
Shares of Chevron have gained 26% in the past six months compared with the Oil/Energy sector’s growth of 20.6%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CVX’s 2026 earnings is pegged at $15.74 per share, indicating 115.9% year-over-year growth. The positive earnings estimate outlook makes the stock attractive for investors.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of forward price-to-earnings ratio — Chevron is trading at a premium compared with the industry average.
View the Zacks #1 Rank List
Image: Bigstock
How Investment in TCO Is Powering Chevron's Next Wave of Cash Growth
Key Takeaways
Chevron Corporation’s (CVX - Free Report) 50% stake in Tengizchevroil (TCO), which operates the giant Tengiz and Korolev oil fields in Kazakhstan, is one of the company’s most valuable international upstream investments. TCO is a key contributor to Chevron’s reserve base, with Kazakhstan accounting for nearly 11% of the company’s proved reserves. The asset recently entered a new growth phase following the completion of the Future Growth Project (FGP) and Wellhead Pressure Management Project in 2025.
The FGP increased Tengiz crude production capacity by approximately 260,000 barrels per day, lifting total gross production capacity to around 1 million barrels of oil equivalent per day (BOE/d). This expansion has become a major driver of Chevron’s production growth, contributing significantly to the company’s 2025 output increase and expected growth in 2026. Management views TCO as a cornerstone asset supporting long-term production and free cash flow growth through 2030.
TCO is also transitioning from a capital-intensive project to a cash-generating asset. Chevron has provided substantial financing for its expansion and received a $1 billion loan repayment in the first quarter of 2026. It also expects additional repayments during the year, further boosting cash flow.
Although higher depreciation expenses and weaker commodity realizations temporarily pressured earnings in 2025, TCO’s long-term value proposition remains strong. The project provides large-scale, low-cost production growth, high-margin barrels, rising free cash flow and meaningful capital returns. As a result, TCO is expected to be one of Chevron’s largest contributors to cash generation and shareholder value creation over the remainder of the decade.
Other Oil Majors Operating in Kazakhstan
Exxon Mobil Corporation (XOM - Free Report) is a major international investor in Kazakhstan’s energy industry, playing a key role in the development of the country’s vast oil and gas resources. Through its local subsidiaries, including ExxonMobil Kazakhstan Inc., the company collaborates closely with the Kazakh government and national oil company, KazMunayGas, to advance exploration, production and transportation activities. A cornerstone of ExxonMobil’s presence in the country is its 25% stake in the TCO joint venture, which operates the world-class Tengiz oil field located along the northeastern coast of the Caspian Sea, one of Kazakhstan’s most significant energy assets.
TotalEnergies SE (TTE - Free Report) has established a strong presence in Kazakhstan through a balanced energy strategy that combines large-scale oil and gas operations with growing investments in renewable energy. The company is a key contributor to the nation’s hydrocarbon production and supports Kazakhstan’s position as a major global energy supplier. TotalEnergies owns a 16.81% interest in the North Caspian Project’s Kashagan field, one of the world’s largest offshore oil developments in the Caspian Sea. At the same time, TTE is advancing Kazakhstan’s energy transition through the Mirny Project, a major renewable energy initiative aligned with the country’s 2060 net-zero emissions target.
CVX’s Price Performance, Valuation & Estimates
Shares of Chevron have gained 26% in the past six months compared with the Oil/Energy sector’s growth of 20.6%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CVX’s 2026 earnings is pegged at $15.74 per share, indicating 115.9% year-over-year growth. The positive earnings estimate outlook makes the stock attractive for investors.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of forward price-to-earnings ratio — Chevron is trading at a premium compared with the industry average.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.