Chevron's Cost Hike and Slump Impact Shareholders and Earnings
Chevron's shares plummeted over 6% after the company announced that costs for its $45 billion Tengiz project in Kazakhstan will rise by about 4%, resulting in a 20% drop in free cash flow from 2025. Output will also be lower than expected in 2023 and 2024. This comes on top of a 25% increase in cost estimates in 2019. The project has faced delays and challenges due to engineering problems, the Covid-19 pandemic, and the need to update infrastructure from the Soviet era. Chevron's CEO reassured investors that there would be no further cost overruns or delays.