⚠ Tengiz Runs Out in 2033High threat

Chevron (CVX) — threat to the moat

Tengiz added 260,000 barrels a day and its profits more than halved, and the concession ends in 2033.

Chevron's largest equity investment is running into two limits at once. It holds 50 percent of Tengizchevroil "under a concession agreement that expires in 2033"1, and it carried the investment at $23,830 million at the end of 20252.

Tengizchevroil, 100 percent ($M)18,872Revenue 202421,986Revenue 20255,779Net income 20242,496Net income 2025Chevron Form 10-K FY2025, Note 7
Revenue up 16.5 percent, profit down 57 percent.

TCO has just completed the Future Growth Project, "which increased crude oil production by 260,000 barrels per day with a total gross output of one million barrels of oil-equivalent per day"3. The results went the wrong way. TCO's revenue rose from $18,872 million in 2024 to $21,986 million in 2025, about 16.5 percent, while its net income fell from $5,779 million to $2,496 million45, as costs and other deductions rose from $10,616 million to $18,419 million6.

Chevron's share of TCO's earnings has fallen with it: $3,375 million in 2023, $3,033 million in 2024 and $1,556 million in 20257. The first quarter of 2026 brought downtime at Tengizchevroil8.

The export route adds a third risk. Most of TCO's crude leaves through the Caspian Pipeline Consortium, in which Chevron holds 15 percent9, and the 10-Q names exposure to "drone attacks on CPC and third-party infrastructure and vessels"10.

Chevron also lent TCO money to build the expansion: the investment includes a loan with a principal balance of $3,500 million for the Wellhead Pressure Management Project and the Future Growth Project11. TCO's own net equity fell from $47,148 million to $41,844 million in 202512.

The concession date is the hard limit. Eight years of production remain under the current terms, and Kazakhstan decides what follows. Chevron's TCO equity earnings are the figure to watch; a recovery toward $3 billion as the new capacity runs would show the expansion paying, while a figure near $1.6 billion would mean it was built for a concession ending soon.

The number that tests this threat
Reported
Chevron share of Tengizchevroil earnings
$1,556M (2025) against $3,375M in 2023

The payoff from the expansion; staying near $1.6bn as capacity runs would mean the project was built for a concession ending in 2033.

Source: Chevron Form 10-K, FY2025 ↗
References
  1. ReportedIt holds 50 percent of Tengizchevroil "under a concession agreement that expires in 2033", and it carried the investment at $23,830 million at the end of 2025.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  2. ReportedIt holds 50 percent of Tengizchevroil "under a concession agreement that expires in 2033", and it carried the investment at $23,830 million at the end of 2025.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  3. ReportedTCO has just completed the Future Growth Project, "which increased crude oil production by 260,000 barrels per day with a total gross output of one million barrels of oil-equivalent per day".
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedTCO's revenue rose from $18,872 million in 2024 to $21,986 million in 2025, about 16.5 percent, while its net income fell from $5,779 million to $2,496 million, as costs and other deductions rose from $10,616 million to $18,419 million.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  5. Moat Explorer calcTCO's revenue rose from $18,872 million in 2024 to $21,986 million in 2025, about 16.5 percent, while its net income fell from $5,779 million to $2,496 million, as costs and other deductions rose from $10,616 million to $18,419 million.
    Moat Explorer calculation from Chevron's reported figures ($ millions unless stated). Segment mix 2025: external sales upstream US 19,608, upstream international 33,844, downstream US 65,331, downstream international 65,545, All Other 104, total 184,432; upstream 19,608 + 33,844 = 53,452, 53,452 / 184,432 = 29.0%; downstream 65,331 + 65,545 = 130,876, 130,876 / 184,432 = 71.0%; upstream US 19,608 / 184,432 = 10.6%; upstream international 33,844 / 184,432 = 18.4%; downstream US 65,331 / 184,432 = 35.4%; downstream international 65,545 / 184,432 = 35.5%. Upstream share of external sales 2015 (4,117 + 15,587) / 129,925 = 15.2%. Intersegment: upstream US 25,910 / 45,518 = 56.9%. Segment earnings 2025: upstream 12,822, downstream 3,022, sum 15,844; downstream 3,022 / 15,844 = 19.1%; upstream 12,822 / 15,844 = 80.9%. Downstream assets 55,243 / 324,012 = 17.0%. Change 2024 to 2025: upstream 12,822 - 18,602 = -5,780; downstream 3,022 - 1,727 = +1,295; 1,295 / 5,780 = 22.4%; Brent 81 - 69 = 12, 5,780 / 12 = about 480 per $1. 2022 upstream 12,621 + 17,663 = 30,284; downstream 5,394 + 2,761 = 8,155. Margins 2025 on sales before eliminations: upstream US 5,815 / 45,518 = 12.8%; upstream international 7,007 / 42,861 = 16.3%; downstream US 1,375 / 72,485 = 1.9%; downstream international 1,647 / 69,925 = 2.4%. Earnings over year-end segment assets: upstream 12,822 / 256,975 = 5.0%; upstream US 5,815 / 84,559 = 6.9%; upstream international 7,007 / 168,200 = 4.2%; downstream 3,022 / 55,243 = 5.5%; downstream US 1,375 / 33,745 = 4.1%; downstream international 1,647 / 21,146 = 7.8%. US downstream 531 / 3,904 - 1 = -86.4%. CPChem 352 / 8,985 = 3.9%; 352 / 903 - 1 = -61.0%. TCO revenue 21,986 / 18,872 - 1 = 16.5%; TCO net income 2,496 / 5,779 - 1 = -56.8%. Hess net income 193 / 48,000 = 0.4%. ROCE 2015-2025: 2.5, -0.1, 5.0, 8.2, 2.0, -2.8, 9.4, 20.3, 11.9, 10.1, 6.6; sum 73.1 / 11 = 6.6% average; years at or above 8%: 2018, 2021, 2022, 2023, 2024 = 5 of 11. Production: Permian 1,000 / US 1,858 = 54%; 1,000 / 3,723 = 27%; Australia 472 / 3,723 = 12.7%; Q2 2026 4,070 / 3,396 - 1 = 19.8%; 4,070 / 3,120 - 1 = 30.4%. Guyana 30% x 1.7 million gross = 510 thousand. Gas: 0.91 x 6 = 5.46 per barrel of oil equivalent; 5.46 / 70.80 = 7.7%; 1.8 billion cubic feet / 6,000 = 300 thousand boe a day. Reserves: 3,723 x 365 = 1,359 million boe a year; 10,591 / 1,359 = 7.8 years. California refining 290 + 257 = 547 of 1,099 = 49.8%. Largest holders 8.56 + 7.50 + 7.00 + 6.70 = 29.76%. Balance sheet and returns: net debt 34,461 / 17,756 = 1.94, up 94%; dividends per share 6.84 / 4.28 - 1 = 59.8%; 6.84 / 6.63 = 1.03; returns 27.1 / 12.3 = 2.2 times; free cash flow 16.6 - 12.751 = 3.8 bn; buyback authorisation 75 - 44 = 31 bn; Q2 2026 buyback 3.0 bn / 16.2 million = $185 a share; shares 1,980 / 1,755 - 1 = 12.8%, 1,980 - 1,755 = 225 million; employees 43,039 / 45,600 - 1 = -5.6%; operating and SG&A 33,444 / 29,240 - 1 = 14.4%, 33,444 - 29,240 = 4,204; DD&A 20,132 / 17,282 - 1 = 16.5%, +2,850; income tax 7,258 / 12,299 = 59.0%. Valuation: trailing sales 184,432 - 90,476 + 114,755 = 208,711; trailing net income 12,299 - 5,990 + 14,282 = 20,591; 403.40 / 20.591 = 19.6 times; 403.40 / 12.299 = 32.8 times; implied forward earnings 403.40 / 12.77 = 31.6 bn, 31.6 / 12.3 = 2.6 times; trailing EPS approximately 20,591 / 1,970 = 10.45. Swings: timing 2.9 + 1.4 = 4.3 bn; international downstream 1,013 + 2,457 = 3,470. Further: California inputs 261 + 253 = 514, 514 / 1,038 = 49.5%; GS Caltex 58 / 4,403 = 1.3%, 437 / 4,403 = 9.9%; equity affiliate income 3,000 / 5,131 - 1 = -41.5%; affiliate production 538 / 3,723 = 14.5%; Hess share of 2025 production increase 261 / 385 = 67.8%; enterprise value less market value 431.95 - 403.40 = 28.55 bn; capital employed 232,934 / 177,698 - 1 = 31.1%; total assets 324,012 - 256,938 = 67,074; Hess issuance 15% / 6% = 2.5 years, 15% / 3% = 5 years; external sales 2015 downstream US 48,420 + 4,426 = 52,846, downstream international 54,296 + 2,933 = 57,229; 2020 downstream US 32,589 - 2,150 = 30,439 - segment earnings, returns and per-unit economics. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Chevron's Forms 10-K, 10-Q, earnings releases, proxy statement and market data; operands shown in the source line.
  6. ReportedTCO's revenue rose from $18,872 million in 2024 to $21,986 million in 2025, about 16.5 percent, while its net income fell from $5,779 million to $2,496 million, as costs and other deductions rose from $10,616 million to $18,419 million.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedChevron's share of TCO's earnings has fallen with it: $3,375 million in 2023, $3,033 million in 2024 and $1,556 million in 2025.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedThe first quarter of 2026 brought downtime at Tengizchevroil.
    Chevron first-quarter 2026 earnings release, Form 8-K exhibit 99.1. — Q1 2026 · publ. 1 May 2026 · source ↗
  9. ReportedMost of TCO's crude leaves through the Caspian Pipeline Consortium, in which Chevron holds 15 percent, and the 10-Q names exposure to "drone attacks on CPC and third-party infrastructure and vessels".
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedMost of TCO's crude leaves through the Caspian Pipeline Consortium, in which Chevron holds 15 percent, and the 10-Q names exposure to "drone attacks on CPC and third-party infrastructure and vessels".
    Chevron Form 10-Q for the quarter ended 30 June 2026 - share repurchases, the Middle East conflict, Venezuela, OPEC+ exposure and litigation. — Q2 2026 · publ. 6 August 2026 · source ↗
  11. ReportedChevron also lent TCO money to build the expansion: the investment includes a loan with a principal balance of $3,500 million for the Wellhead Pressure Management Project and the Future Growth Project.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
  12. ReportedTCO's own net equity fell from $47,148 million to $41,844 million in 2025.
    Chevron Form 10-K for fiscal 2025 - Note 15 equity affiliates: Tengizchevroil, Chevron Phillips Chemical, GS Caltex and others. — FY2025 · publ. 24 February 2026 · source ↗
Sources
Generated September 25, 2026