One of Exxon's Biggest Oil Fields Is Running Out of Room to Grow. Here's Why That's Not a Crisis.

ExxonMobil recently warned Kazakhstan that the country's largest oil field, Tengiz, will reach peak production next year and subsequently decline. Exxon estimates output will drop by nearly 40% by 2035 to around 500,000 barrels per day. This decline also impacts Chevron, as the two companies share a 50% interest in the Tengizchevroil partnership.

Despite the field's impending plateau, it isn't a crisis for ExxonMobil. Exxon has another growth opportunity in Kazakhstan with the Kashagan field, operated by a consortium including Exxon, Shell, and TotalEnergies. Exxon sees potential for an $80 billion investment to develop the field's western part, which could produce up to 600,000 bpd.

However, Kashagan is mired in a dispute with Kazakhstan, which has levied a $5 billion environmental fine and claims $150 billion in lost revenue due to development delays. These disputes prevent Exxon from investing in Kashagan until they're resolved. Exxon is also investing $100 billion through 2030 in major capital projects to boost its oil and gas production, with significant growth expected in the Permian Basin, Guyana, and LNG.

These growth drivers help offset potential declines in Tengiz and Kashagan production. While Kashagan and Rovuma projects face risks, Exxon's diversified growth pipeline provides a safety net.