Chevron or ExxonMobil: Who Does Kazakh Media Favour?
America’s two largest oil companies have significant investments in Kazakhstan, yet Kazakh media overwhelmingly favours Chevron over ExxonMobil.
By Sharanya Rajiv, Senior Analyst and Manager of Operations
American oil giants, Chevron and ExxonMobil, have been leading investors in Kazakhstan’s oil and gas sector for almost three decades. Both companies arrived in Kazakhstan in 1993, soon after the country’s independence, and between the two of them, have stakes in the country’s three largest oil and gas fields. They first invested in TengizChevrOil (TCO), which operates the giant Tengiz oil field. TCO is a consortium of companies led by Chevron that holds a 50% majority stake, while Exxon Mobil holds a 25% stake. Chevron also holds an 18% stake in the Karachaganak Petroleum Operation since 1997 and Exxon Mobil holds a 16.81% stake in the North Caspian Operating Company (NCOC) that operates the Kashagan field. In 2018, Tengiz produced 623,000 barrels per day of oil, Karachaganak produced 278,000 barrels per day, and Kashagan produced 281,000 barrels per day.
How does Kazakh media perceive these two American oil and gas heavyweights that have made large investments in the country? What factors determine favourable coverage? This article will compare media sentiment toward Chevron and ExxonMobil and examine why one is more popular than the other.
How does Kazakh media perceive these two American oil and gas heavyweights that have made large investments in the country?
Chevron Mentioned More Often, More Favourably
From 2016 to 2020, Kazakh media articles mentioned Chevron around three-and-a-half times more often on an average, compared with ExxonMobil. Moreover, while mentions of both companies somewhat declined, the gap between Chevron’s annual frequency of mentions and ExonMobil’s kept widening over this period. In other words, compared with ExxonMobil, Chevron has become even more popular.
Along similar lines, Kazakh media has reported on Chevron more favourably than ExxonMobil since 2016. On average, media sentiment toward Chevron has been around 35% more positive than ExxonMobil over this period. Interestingly, Chevron has also usually been covered more positively than the media’s baseline sentiment toward all issues, whereas ExxonMobil has usually been covered more negatively. However, there have been two exceptions. First and most recently, in 2020, sentiment toward both companies was almost identical, potentially because of the slump in the oil and gas sector in the first half of 2020 that affected both companies. Regarding this, it is worth noting that this analysis is based on data until mid-2020 which means that it doesn’t account for the recovery in the oil market later in the year. Second, in 2018, sentiment toward ExxonMobil almost caught up with Chevron’s. This was potentially due to two factors. In January that year, then Kazakh President Nazarbayev met ExxonMobil Chairman and CEO Darren Woods during a visit to the United States, the only one-on-one visit between the two during the time period this analysis covers. Later that year, NCOC (of which ExxonMobil is a shareholder) signed an agreement to provide a development plan for the Kalamkas-Sea field, which is part of the same contract area as Kashagan.
What Factors Explain Chevron’s Higher Popularity
Chevron’s popularity and Kazakh media’s favourability toward the company seem to draw from three factors. First, by virtue of playing a leadership role in the TCO consortium as well as its 50% majority shareholder status, Chevron has always been front and centre in all media reports about the Tengiz oil field. On the other hand, while ExxonMobil is a major investor in two of Kazakhstan’s oil fields, it doesn’t operate them. In addition, neither ExxonMobil nor any other foreign companies that have invested in these old fields hold such a large proportion in any one oil field. As a result, none are mentioned as frequently in Kazakh media. Both Royal Dutch Shell and ENI, which are joint operators of Karachaganak and the latter is also the operator of the Kashagan field, are only mentioned in 2.6% and 4.9% of media reports between 2016 and 2020. This is higher than ExxonMobil’s mentions in 1.9% of articles but much lower than Chevron’s mentions in 6.8% of articles. However, while Chevron’s higher share in Kazakhstan’s oil and gas sector is responsible for its frequent mentions, its favourable media coverage draws on two other factors.
However, while Chevron’s higher share in Kazakhstan’s oil and gas sector is responsible for its frequent mentions, its favourable media coverage draws on two other factors.
Second, Chevron’s senior leadership has held more frequent meetings with the Kazakh leadership. At the highest levels of the company and government respectively, the Chairman and CEO of Chevron met the Kazakh President thrice, in 2017, 2018, and 2019, based on information available from the Kazakh Presidential Office. In contrast, the office only lists one meeting between the Chairman and CEO of ExxonMobil and the Kazakh President during the period this article considers.
Third, and perhaps most importantly, since 2016, Chevron and other consortium members of TCO have been making another round of investments to expand the Tengiz oil field. This is being achieved through the Future Growth Project-Wellhead Pressure Management Project, which has received extensive media coverage as well as positive mentions by the Kazakh government in the past five years. The fact that large, shiny projects such as this are responsible for positive sentiment toward Chevron is evidenced by the fact that sentiment toward ExxonMobil almost caught up with Chevron’s back in 2018 when the NCOC was seriously considering developing a new oil field. However, this fell through in 2019 after NCOC judged the Kalamkas-Sea Field to be uneconomic and resulted in sentiment toward ExxonMobil sinking back to the previous levels. This is despite the fact that the Kashagan field, of which ExxonMobil is a shareholder and NCOC is the operator, is the first offshore oil and gas field in the Kazakh sector of the Caspian Sea, the largest international investment project in the country, and is the latest successful project as it only began commercial production in 2016. More importantly, in 2019, NCOC stated that it has begun planning a second phase to boost production. The fact that it hasn’t boosted sentiment yet suggests that the Future Growth Project’s branding, in addition to its economic significance, has played an important role in positive sentiment toward Chevron.
The Future Growth Project’s branding, in addition to its economic significance, has played an important role in positive sentiment toward Chevron.
Implications
Chevron’s stakes in the Kazakh oil and gas industry are undeniably much greater than any other company. It holds a 50% stake in the country’s largest oil field, Tengiz, as well as an 18% stake in Karachaganak. It also leads the consortium that operates Tengiz. As a result of these factors it is mentioned much more frequently than ExxonMobil and even any other foreign company in this sector. However, this isn’t why Kazakh media seems to favour Chevron over ExxonMobil, with media sentiment toward the former being more positive since 2016. This trend seems to be a result of the company’s frequent engagement with the Kazakh leadership as well as the fact that it is leading the expansion of the Tengiz field which has been branded as a shiny new project and has been underway since 2016. In short, media sentiment not only draws on the volume of investments by a company, but also relies on shiny new projects and high-level engagement with the Kazakh government.
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ABOUT THE AUTHOR
Sharanya Rajiv is a senior analyst and the manager of operations at Hillhouse Analytics. Her research focuses on geopolitical competition and energy politics in Eurasia. Previously, she was a senior program coordinator at the New Delhi center of the Carnegie Endowment for International Peace, where she conducted research on India’s strategic interests in Eurasia. Sharanya is fluent in Hindi and Tamil and speaks intermediate Russian.
ABOUT HILLHOUSE
Hillhouse Analytics specializes in data driven analysis on issues related to sustainable development, infrastructure, and energy in frontier markets, helping organizations understand today’s challenges and opportunities. We bring world-class expertise to regional challenges by combining the best of international academic and research practices with a rigorous and informed local perspective, delivering the best of both worlds. We achieve this through our custom-built Hillhouse Sentiment Analysis Tool that tracks opinion trends across local news media. Our tool was a finalist for the World Bank’s Global Disruptive Tech Challenge 2021. To learn more about retaining our team for custom analysis and reports, please click here.
